When the pandemic hit in March 2020, many nonessential surgeries and routine medical procedures were put on hold so hospitals could care for Covid-19 patients and mitigate the spread of the virus.
However, even for those who didn’t see a doctor all year because of the pandemic, their health insurance premiums remained the same.
Now, some Vermonters may have lower premiums in 2022 based on the Vermont Department of Financial Regulation’s examination on the impacts of Covid-19 on health insurance costs in 2020 and 2021.
“What it meant is a lot of people couldn’t go to the hospital for routine procedures, but they continued to pay their premiums, so we wanted to see if that was unfair, and carriers were being overpaid,” said Mike Pieciak, commissioner of the Vermont Department of Financial Regulation.
The department systematically examined costs by carrier and market segment — a term referring to different groups sold the same product by insurance companies — to determine if policyholders had paid too much, too little or just the right amount in 2020 and 2021.
“In several instances, it was determined that policyholders were paying too much,” Pieciak said. Often, costs evened out between 2020 and 2021 because of a phenomenon called “deferred care,” referring to the increase in medical appointments in 2021 as more and more people have been vaccinated and ventured back to their doctors’ offices.
“So all of the appointments that didn’t happen in 2020 are coming back in 2021 — for example, a knee surgery that was supposed to be 2020 but was put off because of the pandemic, now everyone is scheduling those for 2021,” Pieciak said.
But in some cases, policyholders paid more than they should have, as in the case of Cigna’s large group market and BlueCross BlueShield’s Medicare supplement market. Cigna will give large group policyholders $118,000, and BlueCross BlueShield will give policyholders in its Medicare supplement market $2 million in relief in 2022.
“After seeing how much of an impact this had for BlueCross BlueShield and Cigna, we decided to expand out and look at other carriers,” Pieciak said, so United Healthcare and Aetna will be examined in the coming months.
Eligible customers can expect to see lower insurance rates beginning in January 2022.
“$2 million is a lot of money in the aggregate. How much does it mean for an individual person? It’s going to have an impact, but it’s not going to change people’s lives. Basically they’ll pay less for that product than they would have otherwise,” Pieciak said.
Vermonters have also received premium relief in auto insurance this year, Pieciak said. Because many people drove way less once the pandemic began, there were fewer crashes in 2020 that insurance companies had to cover. His department approved $24 million in premium relief for automobile insurance policyholders due to the pandemic.
The department will release its findings for Aetna and United Healthcare in the coming months. In the meantime, the Green Mountain Care Board is examining if premium relief might be an option for the BlueCross BlueShield individual and small group markets in 2022. The board is expected to issue a decision in early August.
