Insurers are due to submit preliminary rates to state regulators in the next six weeks. They are operating under a mountain of fundamental uncertainty. I expect tremendous variance in initial rate requests as some insurers will guess optimistically relative to other insurers. As more information comes in over the summer, the variation in rates will decrease. I expect more counties to have only a single ACA insurer in 2021 than in 2020 as one rational response insurers have to fundamental uncertainty is to exit marginal markets.
The LA Times has a really good article on another set of uncertainty that insurers can barely guess at beyond acknowledging that this is something to lose sleep over:
for the sickest patients, infection with the new coronavirus is proving to be a full-body assault, causing damage well beyond the lungs. And even after patients who become severely ill have recovered and cleared the virus, physicians have begun seeing evidence of the infection’s lingering effects.
In a study posted this week, scientists in China examined the blood test results of 34 COVID-19 patients over the course of their hospitalization. In those who survived mild and severe disease alike, the researchers found that many of the biological measures had “failed to return to normal.”…
doctors are worried that in its wake, some organs whose function has been knocked off kilter will not recover quickly, or completely. That could leave patients more vulnerable for months or years to come….
So how much care will someone who survived a severe COVID-19 infection need in 2021?
No one knows.
There is tremendous uncertainty that will tangle up actuarial pricing models for the ACA individual market and every other fully insured market. Insurers won’t have a reasonable estimate of what the consensus future looks like when rates are filed in May. We can expect a journey into the unknown which is not a place an actuary wants to be in.