Payers Offer Premium Credits for Cash-Strapped Members, Employers
Priority Health offers premium credits to members and employers as many struggle financially during the coronavirus pandemic.
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- Surplus funds that would normally go toward nonessential health services will instead be used to extend premium credits and waive cost-sharing for hard-hit populations, Priority Health announced.
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“Small businesses and individual consumers have been particularly hard hit during this outbreak, we hope this relief will make it easier for them to stay covered,” said Joan Budden, president and chief executive officer of Priority Health. “We also recognize that the lives and health care routine of our senior members has been significantly impacted. We want to make sure these members are able to reengage with the health care system without having to worry about the cost of a copay to see their doctor.”
Nonessential healthcare service utilization has dropped since CMS requested that providers abstain from providing assistance in order to dedicate their expertise to the coronavirus efforts or to prevent patients from coming into potentially contaminated provider offices. While CMS has eased this guidance, some providers and hospitals are still abiding by it.
“Priority Health set premium rates for 2020 based on expected health care costs. With many health procedures either being delayed or canceled, and consumers overall accessing less health care services, the company’s expected costs have been reduced,” the health plan explained in the press release.
Thus, Priority Health is giving those premium dollars back to its members via waivers and credits.
First, the company waived cost-sharing for primary care services for Medicare Advantage members. The waiver covers in-person and telehealth services delivered between May 1, 2020 through the end of the year.
Second, the health plan is providing a 15 percent premium credit for members in its individual health insurance market plan, MyPriority Individual. The credit is valid for the months of June and July.
Third, the payer is offering a 15 percent premium credit available to small group health insurance marketplace employers. These employers have anywhere from two to 50 employees. Like the individual health insurance marketplace members, employers on this plan can receive the credit for June and July.
Lastly, for large, fully-funded companies, employers can receive premium credits in the fourth quarter. It is too early to tell what percentage of credit will be available to them.
The pressure to reduce health service utilization was not the only reason that Priority Health could fund these actions, the plan noted. As a nonprofit, Priority Health does not have dividends for shareholders. It also has low administrative rates, spending nearly 90 cents per dollar on member care, according to their medical cost ratio in fiscal year 2019.
Financial relief from healthcare costs has been in high demand, even before the coronavirus pandemic. Healthcare spending in America has been escalating for years. Premiums and deductible costs exceeded median income growth for workers from 2008 to 2018.
Now in 2020, many unemployed Americans are struggling to replace their employer-sponsored health plans due to health plan costs.
Prices have not dropped for those who still have an employer-sponsored health plan, either. Health plans are still determining their premium rates for 2021 and some surveys indicate that payers do not expect to raise their rates.
However, in mid-April 2020, a Peterson-Kaiser Family Foundation brief suggested otherwise, underscoring the uncertainties that coronavirus presents.
“The consequences of guessing wrong could be dire for some insurers,” the researchers stated. “Insurers may have an incentive to over-price their plans, particularly on the individual market where many enrollees are subsidized and sheltered from premium increases.”
Priority Health is not alone in seeking to provide financial relief to members in these unpredictable times.
UnitedHealthcare has promised $1.5 billion in member relief through premium credits and additional programs such as housing and food support.
