Insurers should prepare for ‘volatile’ individual market due to COVID-19 pandemic: study
June 11, 2020 / by Robert King
The individual market next year is likely to be volatile due to the COVID-19 pandemic as new enrollees could cause adverse selection, a new report said.
The report from the American Academy of Actuaries (PDF) released Thursday comes as individual and small group insurers are trying to figure out their rates for the 2021 coverage year. But that task has become extraordinarily difficult with the COVID-19 pandemic injecting massive uncertainty into the healthcare market.
“The composition of the 2021 individual market is likely to be volatile … there is likely to be some level of influx of individuals who lost employer-sponsored coverage due to the economic downturn resulting from the COVID-19 pandemic,” the report said.
While many of the individuals who lose their income could qualify for Medicaid, some will not, especially if that state hasn’t expanded Medicaid, the actuaries noted.
