When doctors abruptly had to reschedule the young girl’s back surgery in April 2020, Claire Lindell had to wait weeks for treatment.
The postpone was especially difficult because the operation addressed many issues, including the 4-year-old’s higher risk of breathing infection— such as from the emerging COVID-19 virus.
According to her parents, A. J. Lindell of Prior Lake, Minnesota,” that was a strong time.”
Claire’s excursion with heath care is now complete. And the Lindells, who constantly kept paying health plan premiums yet when attention was absent, help explain an amazing financial backstory with the pandemic.
Five years ago this flower, hospitals and clinics in Minnesota and across the nation were scrambling to conserve resources for the anticipated surge of COVID-19 people, which some feared would overburden the system.
However, COVID-19’s first year was a historic year because of a shocking side effect: the health system known for its inexorable growth truly offered less treatment in most types. Democratic methods were put on hold expected to , evacuation orders, and even after they lifted, some patients also opted to stay away.
Health carriers were significant economic beneficiaries of this wonder.
As they continued to collect insurance premiums, their revenue increased by 52 %, while fewer people visited the doctor. Whereas health plans across the country collectively reported an average of$ 27 billion in operating profit per year between 2017 and 2019, operating earnings across the industry in 2020 surged to$ 41.4 billion, according to a Minnesota Star Tribune analysis of data provided by Mark Farrah Associates, a Pennsylvania-based analytics firm that tracks data across all U. S. states and territories.
According to the study, in 2020, users paid health insurers about$ 1 trillion in revenue, translating to an operating profit of just over 4 percent per dollar of profits. Even after being required by federal legislation to gain some extra profit  through record rebates.
Minnesota-based UnitedHealth Group, parent organization of health insurance big United Healthcare,  , saw its next quarter earnings double , that time. In their 2020 economic benefits, three of Minnesota’s four largest philanthropic health insurers, Blue Cross and Blue Shield of Minnesota, HealthPartners, and UCare, noticeably improved.
All four of those carriers and others in the sector made financial relief plans for clients and cash-strapped health care providers that essentially reduced the amount of discount requirements under the 2010 Affordable Care Act. UnitedHealth Group only provided$ 4 billion in superior credits, cost-sharing exemptions, payments to companies and other support.
In addition, insurers across the sector have mandated relatively moderate advanced increases over the next two years, according to Mark Farrah Associates information, which was obtained from public papers with state insurance commissioners. ( The statistics don’t include coverage offered by employers who self-insure their health plans. )
Fast forward past the end of the epidemic, and the health care financing story has changed drastically — prices are rising much faster then, amid , a health care expense surge , that includes , expensive new GLP-1 medications , for diabetes and weight loss.
According to Cynthia Cox, a researcher who follows the individual health insurance market for California-based KFF, those$ 41.4 billion profits from the first year of COVID are so far in the rearview mirror they can’t provide much cushion against today’s trends.
Cox claimed that the benefits had already been “kind of paid out.”
” During the pandemic, basically what insurers were doing was offering , cost-sharing waivers and premium waivers. And then, following the pandemic, they increased premiums for those first few years by less than they otherwise would have,” she said. ” But now, in part because of inflation, health care costs are going up once more and rising faster than usual.”
For group health plans, premiums across the country increased an average of 7.8 % this year before employers made benefit design changes to moderate the jumps, said Brooks Deibele, an executive vice president in the Twin Cities office of Holmes Murphy, a benefits consultant.
According to Deibele, the increase was the largest in more than a decade and was fueled by higher healthcare costs as well as the more expensive prescription medications being used. Higher profits may have enabled some health insurers to absorb some of the rate increases for customers the first or two years after the pandemic, he said. But that time is done.
Any financial repercussions the carriers experienced from the pandemic, according to Deibele, who is the head of the Iowa-based company’s employee benefits practice.” We’re well beyond that, at this point,” Deibele said.
According to Christine Eibner, director of the California-based RAND Corp.’s program for health care payment, cost, and coverage, the U.S. health care system saw a significant decline in use of preventive services like colonoscopy and mammography as well as cuts to some elective surgeries in 2020. There was a large increase at the time of doctors providing care via telehealth, Eibner said, but it wasn’t enough to offset the decline in office visits.
According to Stefan Gildemeister, an economist with the Minnesota Department of Health,” some clinics and health care providers closed services or restricted access to certain procedures, and patients sought to avoid health care settings because they wanted to reduce their exposure to a highly virulent virus.”
According to state health department data, Minnesota had 68, 000 fewer outpatient surgeries overall in 2020 than the same time last year. Annual emergency room visits fell by about 300, 000 to 1.67 million during the pandemic’s first year.
As a result of the decline in acute care admissions and outpatient days, Minnesota’s population has not yet returned to pre-pandemic levels as of 2023.
Prior Lake, Minnesota’s Claire Lindell indirectly contributed to a small portion of this decline.
After Lindell couldn’t have surgery in April 2020, doctors at Gillette Children’s Specialty Healthcare in St. Paul operated in July and August. Although her surgeries were finished in the calendar year, hospital officials claim that earlier patient delays caused a domino effect.
In the end, some cases were moved to the following year, lowering the pay for commercial health insurers in 2020.
During those opening weeks of the pandemic, there was  , a 60 % decline in ambulatory care , across the country.
” It’s really striking,” said University of Minnesota health economist Peter Huckfeldt.
The final outcome is depicted in the medical loss ratio ( MLR ), a crucial metric for health insurers that depicts the proportion of their premium revenue spent on treating patients.
Across the country, this ratio fell from 87.2 % in the pre-pandemic period to 85 % in 2020, according to Mark Farrah Associates.
The law requires that health insurers pay consumer rebates to make up the difference when an insurer’s MLR falls below certain benchmarks, such as 80 % in the individual market,  , and 85 % in the market for large employer groups. Rebates hit record highs in 2020, according to RAND’s Eibner, and they did the same thing the following year.
With group coverage, rebates go to the plan’s sponsor, typically the employer, rather than the individual patient. Plan sponsors are expected to offer some rebate savings to employees, but it might be in the form of lower future premiums rather than individual rebate checks.
However, Eibner said that insurers” can’t really hoard it, because they are subject to these minimum loss ratio requirements.” ” So they couldn’t just pocket all of that — they had to pass some of it back”.
MLRs have increased once more in the last three years as did higher medical costs. Ezra Golberstein, an associate professor in the division of health policy and management at the U.S., said the trend of rising costs explains why premiums are still rising.
” This is a period when we are seeing things like the explosion of the GLP-1 drugs, which are very expensive, and we’re seeing the continued growth of a lot of different biologic drugs that are also very expensive”, Golberstein said. That is to say nothing about the ongoing consolidation of the healthcare delivery systems, which also drives up prices.
According to Eibner, general inflation has been influencing the budgets of health care providers, putting an increase in costs on the rise. She also cited “workforce shortages that may be affecting prices”.
According to Mark Farrah Associates, the most recent year data is available, showing that insurers ‘ average profit margins decreased by about 2.4 % in 2023 from the pre-pandemic period. The data includes coverage for individuals, groups that are fully insured, and private health plans that offer Medicaid and Medicare coverage.
The precise mix of factors pushing up premiums can vary by market, said KFF’s Cox, noting that individual market health insurers don’t typically cover GLP-1 medicines for weight loss. Even so, those insurance premiums are up about 7 % this year, the highest rate of growth since before the pandemic.
Private health insurance costs always tend to rise, but overall, for 2020, they were down 0.4 %. Spending by the federal government — including big investments for vaccine development and to help health care providers — grew by more than one-third, driving an , overall increase in health care expenditures by year-end.
According to HealthPartners ‘ health insurance division in Bloomington, Minnesota, claims for the spring of 2020 were lower-than-expected for about three months, followed by a significant increase in claims in the third and fourth quarters.
The insurer reported that in 2023, claims costs increased by 15 % and included$ 65 million in prescription drug spending for the third consecutive year.
” Specific to GLP-1s, we paid about$ 12.5 million for that class of drugs in 2022 and$ 46.1 million in 2023″, the insurer said. Because we know our members can’t afford the premium increases that would be required to cover the drug, we put limitations and exclusions on this category of medication for 2024.
When patients believe that coverage denials are preventing needed care, cost controls by insurers become contentious. A. J. Lindell said he had to spend months in late 2021 and 2022 going through various appeals to get an insurer to pay for Claire’s in-home care.
He claimed that this was just one of several instances in which the family has dealt with over the years, but there were no coverage snags during COVID’s first 18 months. In that time, health plans ‘ financial assistance frequently included the waiver of certain regulations that led to denials.
Claire Lindell was born with a genetic condition whose impacts extend to her heart and lungs.
Surgeries in 2020 addressed a number of her spine curvatures and have unmistakably improved her lung function, according to A. J. Lindell. Additionally, the procedures made it easier for her to keep her head raised and look around more easily, enabling her to better communicate with her peers and family and observe the world around her.
The good outcome ameliorated the stress of that initial treatment delay, Lindell said, along with the challenge of repeat hospitalizations during the public health emergency.
He said,” She’s thriving at school.” She can interact with people and leave a lasting impression in the world. It’s something that five years ago— there was no way we could have even pictured this”.
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The Minnesota Star Tribune, 2025.
Tribune Content Agency, LLC distributed.
