Here’s what we’re wondering: Is there really a tsunami of patients set to crash down on the healthcare system as the pandemic dies down? Here’s what (we think) health insurers are wondering: “Will that wave wipe out the massive profits we’ve raked in due to the pandemic-driven lag in people seeking care?” If we look to Anthem, we gather that this theoretical tidal wave is not something to worry about, based on comments made by the insurer’s CFO, John Gallina. On a call with investors in mid-April of this year, Gallina dismissed concerns about “a giant backlog” of looming care needs.
On the other hand, UnitedHealthcare seems to have a different outlook. They’re worried enough about “expected medical cost increase” to plan a sharp hike in premiums—up to an incredible 17.5%— in Rhode Island starting next year. This price jump is perplexing to us given United’s upward-trending bottom line. It seems that Rhode Island Insurance Commissioner Patrick Tigue thinks so too. He says, “Recently, health insurers have generated substantial profits as a result of the reduction in services experienced during the coronavirus.”
According to Becker’s, Tigue announced that he’ll be taking steps to determine whether the premium increases are justified. “My office will scrutinize the requested increases and critically evaluate [them], given the overall financial health of the insurers,” he says.
If United’s definition of “expected medical cost increase” means projecting that patients will suddenly storm hospitals seeking care for unmet needs, we’re skeptical. Shouldn’t we be seeing signs of this surge by now? It’s the middle of 2021, with no sign of a wave of patients—and there are plenty of pandemic-driven profits still rolling in.
In our experience, insurers like United claim that a large portion of premium increases come from rising reimbursement rates to hospitals and providers. And we also know that United has been cutting costs left and right. First, by booting providers out of network nationwide, as they recently did with thousands of ED doctors, and also by reducing the rates they pay providers. Putting these pieces together, we’re wondering whether the premium rate hike is just a way for United to get the best of both worlds—more money coming in from their members and less money going out to providers. We’re glad to see that Commissioner Tigue is standing up for his state’s health insurance customers. We’ll be very interested to find out what he decides—and whether Rhode Island’s ruling will affect other insurers’ machinations around premium rate spikes of their own.