Insights

Health insurance premiums to increase in 2021, 4 things to know

Khang T. Vuong08 Oct 2020

"This is where there's no place for insurers to hide," Lee said. "(COVID-19) is touching every American, it's going to touch every insurer ‚Ķ These costs have to be paid; the question is how are they going to be paid." ‚Äì Peter Lee, Executive Director of CoveredCA, California‚s individual exchange.

As Congress and state governments moved to mandate no-cost Coronavirus COVID-19 testing and treatments for Americans, providers and insurers are fighting a new battle: the $103 billion-dollar bill for COVID-19 testing and treatments this year, according to a projection from Covered California‚s office of actuary.

According to the same study, commercial insurers like Blue Cross Blue Shield, Aetna, Humana, Cigna, and Oscar Health could increase premiums between 4% to 40% for 2021.  

A Twitter user's Notice of Proposed rate with a 20% increase in premiums for 2021

Why are health insurance carriers increasing premiums for 2021?

There are a few factors at play, but most importantly, the cost of COVID-19 stesting and the cost of treatments.

Cost of testing: the cost of Coronavirus COVID-19 testing varies depending on the type of insurance and the geography, ranging from $61-$240 per patient per test.

Cost of treatments: for those who need hospital care, the cost for an episode ranges from $30,000 for Medicare to $72,000 for commercial insurance.

"Plans in 2021 will price not only to cover losses they did not plan for this year, but to cover anticipated costs next year," said Peter Lee, executive director of Covered California.

 

People are voicing concerns via Twitter

We conducted a quick analysis of Twitter and found that hundreds of people already received letters from insurance carriers saying that premiums will increase at a 20% on the lower end and up to 48% in selected cases. For high deductible plans, which already have a high level of cost sharing, increasing premiums could further push more employers to ration health benefits and push individuals into becoming uninsured.

Among individual health plans in NY, Oscar Health proposed the highest increase at 19.1%. For small group (employer-sponsored plans), Oscar Health proposed an increase of 29.1%, followed by Emblem at 20.9%.

The average monthly premium of a non-subsidized Bronze plan in New York is ~$550. That means the same plan could cost $660 a month at a 20% increase or $770 a month at a 40% increase.  

We also did some research into deductible levels and found no significant change between current year and 2021.

 

 

NY health insurance premiums increase 2021 ‚ Individual Health Plan (Obama Care)

According to the NY Department of Financial Services, as of June 5th, 13 insurance carriers had filed proposed rate change for 2021. The department has the discretion to accept, modify, or deny the adjustment based on the justification for a rate change.

Individual health plan2021 Rate change
Oscar*19.10%
Fidelis (New York Quality Healthcare Corp)*18.80%
HealthPlus HP, LLC (Formerly Empire)*16.60%
UnitedHealthcare of New York Inc*13.80%
MetroPlus*9.60%
Emblem (HIP)*9.50%
MVP Health Plan*6.70%
CDPHP*4.30%
Healthfirst PHSP, Inc.*2.40%
Healthfirst Insurance Company, Inc.1.80%
Excellus*1.50%
Healthnow New York*-1.90%
IHBC*-3.70%
Weighted Average11.70%

NY Health Insurance Premiums Increase 2021 – Small Group Plans

Small group2021 Rate Change
Oscar29.10%
Emblem (HIP)20.90%
Aetna Life19.60%
Empire Healthchoice Assurance*16.10%
Oxford Health Insurance Inc*13.60%
MetroPlus*11.50%
UnitedHealthcare Ins Company of New York10.90%
CDPHP*7.40%
MVP Health Services Corp.*6.10%
Healthfirst Insurance Company, Inc.*5.50%
Healthnow New York5.40%
Excellus*4.40%
MVP Health Plan*4.10%
CDPHP UBI*1.40%
IHBC*0.40%
Weighted Average11.40%
  

SOURCE: Department of Finance Services

 

Are there any more affordable options?

Yes. If you are forced to downgrade your plan due to premium rising, you can add Mira as supplemental benefits to help you get affordable copays for primary care, urgent care, and essential lab tests (STD and blood test) before hitting the deductible. Mira is similar to a turbo boost option to supercharge your health plan.

For example, you used to get $50 copay for lab tests with a Gold Plan ($800-900/month), now you are forced to downgrade to a Bronze Plan ($500-$600/month) due to cost, you can add Mira for $25/month to access those essential healthcare services at an upfront affordable copay vs. paying 100% full price before hitting deductible.

 

If you are low-income (<$20K), you could qualify for state-based Medicaid.

If you are under 30 and make less than $48K, you may qualify for federal subsidy for the same plan on the exchange but it would still cost more compared to last year.

 

References:

https://www.modernhealthcare.com/insurance/covid-19-could-prompt-higher-2021-insurance-premiums-benefit-cuts

https://www.coveredca.com/newsroom/news-releases/2020/03/24/covered-california-releases-the-first-national-projection-of-the-coronavirus-covid-19-pandemics-cost/

https://www.dfs.ny.gov/apps_and_licensing/insurance_companies

 

U.S. healthcare is expensive and opaque. Mira is changing that!

Mira is a new option for you to get essential healthcare for $45/mo. Urgent care. Free COVID test. STD test. Blood work. Prescriptions. Gym membership discounts.