Ending the COVID-19 emergency sparks questions about health insurance

Depending on how a few things on the horizon play out, the relationships between physicians, other health care professionals, and the insurance industry could become a bit more strained in 2023.

Michael Giusti, MBA
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Factors ranging from the end of the COVID-19 emergency, to the repercussions of the ongoing medical labor shortages, and the possible widespread consequences of a potential recession, all make it difficult to tell how the coming year is going to look when it comes to health insurance from a providers’ standpoint.

Emergency’s end

One way or another, President Joe Biden has announced that come May 11, 2023, the federal COVID-19 emergency declaration is going to end. As all health care providers know, that doesn’t mean that the virus will suddenly go away, but it does mean that some insurance provisions designed to fight it will.

One of the main things that is scheduled to change with the end of the emergency declaration is that cost-sharing for COVID-19 vaccine administration and testing will resume. During the emergency declaration, those services were covered without the patient ever paying a dime.

Now that the emergency declaration is over, the patient cost is going to depend on their coverage’s copay and coinsurance schedule – presuming they are insured.

Another huge change coming with the end of the emergency is that Medicaid is no longer going to be under a directive to not drop currently enrolled patients. During the emergency, if a patient’s financial situation improved to the point that they were no longer eligible for the low-income insurance, they were not supposed to be dropped from Medicaid.

Now they will instead be referred to either an employer’s policy or a policy through the Affordable Care Act Health Care Exchange, which they will be responsible for purchasing on their own, potentially with the help of a federal subsidy.

Medicaid’s resumption of dropping patients who no longer are financially eligible for coverage could initially lead to more than 5 million patients losing coverage in the short run. How many move to an employer-sponsored or exchange plan remains to be seen.

Telehealth

One of the biggest clinical trends to emerge during the COVID-19 pandemic was the heavy push toward telehealth.

A big driver toward telehealth was that the U.S. Centers for Medicare & Medicaid Services (CMS) waived their previously strict requirements to cover telehealth – largely allowing many previously ineligible patients to use the services and have them covered by federal health insurance. Although that waiver was part of the COVID-19 emergency declaration, CMS has issued an extension to continue to allow telehealth in its current form at least through December 2024.

That doesn’t mean that everything is necessarily going to keep going as-is for telehealth providers. With the expiration of the emergency declaration, there are now some questions that may emerge for cross-state licensure where waivers had previously been put in place but that now will be expired along with the emergency.

There are also likely going to be limits coming to providers who issue prescriptions for controlled substances over telehealth without an in-person evaluation.

Still, with the pandemic forcing the door open on telehealth, it is unlikely patients will let the door slam back shut any time soon.

Cost pressures

One of the biggest points of contention between the medical community and the insurance world is in the area of costs and reimbursements. With the cost pressures expected in 2023, there are no signs that tensions are likely to ease.

According to the U.S. Bureau of Labor Statistics, unemployment in the health care field was down to 2.2% for the first part of this year – well below the already historically low national unemployment rate, and at a level that puts strong leverage in the hands of job seekers who are demanding higher wages.

And that pricing pressure is showing up in the numbers, with wages up 5.7% in the health sector in the last year alone, according to the St. Louis Federal Reserve.

So, with costs pushing up for providers and the health care networks, the natural inclination is to push the insurers for higher reimbursement rates when contracts are up for renewal.

But cost pressures are pushing against insurers as well.

Higher interest rates are pushing up underlying costs for insurers, making it more costly to offer insurance policies in general. And many insurers are likely to push back hard against reimbursement rate increases because they are bracing against fears that a recession might reduce enrollments.

If a recession does emerge, that could lead to fewer people enrolled in employer-sponsored health insurance plans, which means less premiums coming in the door to pay for those higher reimbursements.

A recession could also spell trouble for health care providers, with fewer people choosing to take care of routine wellness if they fear for their job security.

The future of care

There is a natural tension between health care providers and insurers, but with potential changes on the horizon, 2023 may prove to be especially uncertain. The end of the COVID-19 emergency seems to be the most certain thing coming, but questions regarding costs, a recession, and the future of care are much less clear cut.

Michael Giusti, MBA, is an analyst at insuranceQuotes.com, which publishes in-depth studies, data, and analysis related to auto, home, health, life, and business insurance. He has worked as a journalist for more than 20 years, writing for national and international publications. He is based in New Orleans.