Riddle Me This: Health Insurance Premiums

So, auto insurance companies, recognizing that the shutdown has significantly impacted the number of miles we're driving, have introduced various discount/rebate programs (since we're apparently having fewer accidents, etc):

"In general, insurers that represent four out of five auto insurance policies sold in the United States have offered to refund some portion of driver premiums."

Which is nice, but for many (most?) of us, our auto insurance premiums pale in comparison to what we pay for health insurance. And since we're seeing the doctor less (and he or she's getting paid less), the question arises:

I’ve gotten $100 back from my auto insurance company because of the decrease in traffic. With health care utilization down as much as 70%, where’s my check from my health insurance company?

— Joe Pilot, MD (@JoeSilverman7) May 20, 2020

This is a fair question, and I've been thinking about it, as well.

My initial thought was that it was a matter of logistics; that is, many folks share the cost with either their employer (group plans) or their fellow citizens (subsidized ACA plans). So peeling that back, how does a carrier track this?

As co-blogger Patrick (and reader/commenter 'farmbellpsu') points out, at least one carrier is giving it a go:

"UnitedHealth commits $1.5 billion for premium rebates ... Members will receive a 5% to 20% premium credit on their June billing statements."

This applies to their individual major medical (one presumes this does not include Short Term Medical) and small group plans. As with various other carriers, they're also waiving cost-sharing (deductibles and co-pays) for certain expenses.

There are, of course, some issues with this plan, notably MLR (Minimum Loss Ratio) rebates required under ObamaCare. UHC has indicated that this new endeavor is not related to that requirement.

The primary driving factor here is that "surgical volumes and non-Covid-19 emergency room visits in April down 40% or more from a year ago, which is more than offsetting increased costs on coronavirus care and expenses."

Okay, so if that's true, then what's the problem with carriers offering to refund premiums?

Let's circle back to my reply to Joe's Tweet, which was that it's going to be very difficult for carriers to differentiate who gets what. And as co-blogger Patrick also points out:

"The relief is being questioned as it is similar to MLR rebates. Meaning, if an employer gets funds back they may be required to share in the refund with employees who have had money deducted from payroll."

But there are, in fact, more layers. Our friend, Healthcare Economist Michael Bertaut, had this rejoinder:

Where is healthcare utilization down 70%???
Ours I’d down more like 10-15%. Only 3% of our April claims were COVID related. And no guarantee the avoided elective procedures won’t skyrocket now. Not the same thing.

— Michael Bertaut (@MikeBertaut) May 20, 2020

[Full Disclosure: Michael works for Blue Cross/Shield of Louisiana]

This is also a fair cop, especially that last. Think about all the folks now chomping at the bit for a haircut, and then imagine how many others have had (or chose) to postpone necessary, but not urgent, medical care.

'Tis a poser.

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