Page 20 - BusinessWest September 28, 2020

preventive care, including checkups, health screenings, and vaccinations.”
Ledoux told BusinessWest that HNE typically doesn’t know the performance of a year until probably three or four months after the year has closed.
In its planning for 2021, he explained, the company must con- sider uncertainties with expenses, which include utilization continuing to pre-COVID levels; increased use of high-cost technology; and costs of new pharmaceuticals, vaccines and testing, as well as increased costs for certain behavioral healthcare for children and adolescents.
Consumers are protected to an
extent by state and federal laws that require health plans to rebate custom- ers annually if the percent of premiums spent on medical expenses falls below a certain threshold.
Under the Affordable Care Act, insurers are required to use a fixed per- centage of the money they take in from premiums for their customers’ medical expenses — at least 80 cents of every dollar they collect in premiums from small businesses and individuals, and 85 cents per dollar for large employers. The remaining 15% to 20% percent is what they are allowed under the ACA to spend on administrative costs like overhead and marketing, and to keep
as profit. Excess revenues are to be returned to consumers in the form of rebates.
Under Massachusetts’ health-insur- ance law, that number rises to 88 cents on the dollar. “If we perform even 0.1% better than 88%, we have to rebate that excess margin back to the market,” Ledoux said, adding that, “in a regular year, our target margin is around 1.9%, which we hardly ever achieve. All these variables make it difficult to make a profit.”
Some of those variables emerged this year in the form of concessions to the pandemic and the stress it has placed on families, he noted. “We
relaxed a lot of rules on how we collect premiums. Normally it’s a 30-day grace period, and we expanded that another 30 days.” HNE also allowed furloughed employees to stay on their companies’ health plans.
“We continue to evaluate our posi- tion in the market,” he added. “There are already protections in place, profits above what would be considered rea- sonable, and a mandate to rebate that back to the market. We already know it self-corrects on its own.”
Meredith Wise, president of the Employers Assoc. of the NorthEast, told BusinessWest that health-insurance premiums haven’t been a big topic among EANE’s members. “We’ve heard from some employers who are get-
ting refunds, but it hasn’t been a major thing that anyone is focusing on at the moment.”
Nationally, insurers are spending a far lower portion of premium revenue on their customers’ healthcare costs. For example, CVS said its medical-ben- efits ratio was 70% for the second quar- ter, compared to 84% over the same period in 2019.
“If we perform even 0.1% better than 88%, we have to rebate that excess margin back to the market. In a regular year, our target margin is around 1.9%, which we hardly ever achieve. All these variables make it difficult to make a profit.”
According to a report in the New York Times, the ACA gives companies
a three-year window to calculate how much to return, so members probably shouldn’t expect relief anytime soon, especially because it’s hard to tell what the rest of the year will bring, with COVID-19 numbers still fluctuating dramatically from state to state, as well as the impact of potentially expensive new vaccines or treatments around the corner. At the same time, many people who postponed getting medical attention could surge back into doc- tors’ offices and submit more bills for coverage.
“The second half of the year could see a lot more care, and higher costs, than the first half of 2020,” according to a statement by America’s Health Insur- ance Plans (AHIP). “However, if these costs never materialize and remain below certain levels, American con- sumers, businesses, and taxpayers are protected by provisions in federal and
The Center for Breast Health
and Gynecologic Oncology
At the Mercy Center for Breast Health and Gynecologic Oncology, we strive to provide each patient with compassionate, individu- alized breast and gynecologic cancer care backed by a broad-based multi-disciplinary team of cancer specialists and complementary support staff. Our focus is on prompt diagnosis, coordinated state-of-the-art cancer therapies, and patient education.
We are enthusiastic about supporting you on your journey. We strive to be a full partner in your cancer care, and look forward to your transition to survivorship and life beyond cancer.
For more information or to schedule an appointment, please call 413-452-6600.
The multi-disciplinary team at the Center for Breast Health and Gynecologic Oncology specializes in the care of women’s cancers including malignancies of the:
Center for Breast Health and Gynecologic Oncology
271 Carew Street, Springfield, MA 01104 • 413-452-6600 TrinityHealthOfNE.org
• Breast
• Endometrium/
uterus • Ovaries • Vulva
• Cervix
• Fallopian
tube
• Vagina
TrinityHealthOfNE.org
Clinical excellence with
A HUMAN TOUCH.
20 SEPTEMBER 28, 2020
INSURANCE
BusinessWest