All health care organizations have hard-to-believe numbers that show the incredible impact of COVID-19. Here’s one data point from Horizon Blue Cross Blue Shield of New Jersey: Weekly claims for telemedicine have jumped from 5,000 to an average of 127,000 — with a one-week high of 170,000.
Here’s the bigger number associated with that: Horizon waived the deductible on all of those calls to make it easier for customers to get the coverage they needed and for providers — often working remotely themselves — to be able to provide it without having to figure out how to collect the copay.
Horizon Executive Chairman Kevin Conlin said the company stands by what it felt was a responsible decision in the middle of a once-in-a-century pandemic.
“We needed to make sure, under these unusual circumstances, that we were responding to the needs of our members,” he said. “And we felt that anything we could do to remove a barrier to their accessing appropriate care was absolutely necessary to do.
“So, we made decisions knowing they were going to be a significant expense. And, so far, we have seen that. Our plan is not to try to recoup this in other areas. This is something that we made a decision essentially to absorb.”
Conlin, in a 60-minute phone interview with ROI-NJ, offered the first insights on how COVID-19 has impacted Horizon, by far the biggest health insurance provider in the state. Eliminating copays for accessing telehealth — for any reason — is just one example, he said.
The organization has lowered the revenue it receives from all COVID-19 related claims, too, essentially eliminating copays and deductibles for any out-of-pocket expenses — from the physician’s office to the emergency room to the hospital and, if needed, the ICU, Conlin said.
“We wanted to make sure that our members were able to get the care that they needed under these very changed circumstances, whether it was for the COVID-related diagnosis and treatment or routine medical treatment or even mental or emotional health support,” he said. “And we wanted to ensure that we were supporting our network of health professionals to help them be in a position to continue treating our members — and also to protect their health — by helping to make forms available that they could maintain their social distancing so that they themselves were not infected.”
Horizon, Conlin said, also is working with employers who are struggling with premium costs — or struggling to find ways to keep furloughed employees covered.
Then, there’s this:
“It’s important to keep in mind that we’re sitting here at the end of May without full knowledge of whether there’s going to be a second wave in 2020,” he said. “There could be further costs associated with inpatient hospitalizations that we could face later in the year.”
Conlin said it’s too soon to be an estimate on the financial impact this will have on Horizon.
Conlin, who assumed the role of executive chairman in April, touched on a number of subjects during the interview.
Here’s a look at more of the interview, condensed for clarity.
ROI-NJ: Our audience obviously has a huge interest in how they can keep their employees covered. At a time when a record number of people have been furloughed or laid off, how is Horizon helping?
Kevin Conlin: There is going to be a lot of transferring from one type of product to a second — and it’s not limited to just going from an employer plan to Cobra. We, as a company, are very aware and very concerned about the impact this economic situation is having on individuals. We also know it’s putting stress on a lot of our accounts in terms of how employers make decisions.
I think it’s important to note that there’s really no established playbook that we can look to for guidance. Having said that, there really is a broad range of options available to help employers help individuals maintain coverage during this situation. We’ve made it easier for employers to keep furloughed employees on their on their health plans through some of the flexibility that we have provided with regard to premium payments. If that’s not something that they’re able to do, we have options to help people remain covered.
It’s easy to overlook ACA plans, but that really is high-quality coverage. Depending on the person’s financial situation, there are some very generous subsidies that are available. And 84% of all ACA enrollees in 2020 have gotten some form of a premium subsidy. So, I think that speaks to the fact that there are some generous subsidies available to them.
ROI: You mention the ACA — but that’s not the only way government can help. How is Horizon working with state and federal officials to find ways to keep individuals covered?
KC: On the Cobra side, we’re actively advocating at the federal level for funding for individuals that have been displaced from their employment as a result of a pandemic. We see this as a very thoughtful and, frankly, very cost-efficient way for the federal government to maintain coverage. And then there’s Medicaid as an option for some individuals.
So, while it’s important to understand how that enrollment’s going to shift from employer-sponsored plans, it’s also critical to understand what that means for the risk pools and the marketplace and what needs to occur to ensure that the system overall is going to be able to adapt. Some of these fixes are going to need the support of Congress and the administration.
We do expect to see a significant increase in Medicaid costs for the state and that New Jersey is going to struggle to absorb those costs. The federal government has stepped up recently through a program called FMAP, which essentially will pick up the state’s cost share for additional Medicaid members for a period of time. That’s a good step.
And, lastly, we’re advocating with Congress to emphasize the need for our commercial markets to remain stable and predictable for both employers and individuals. We’re advocating that Congress should create a temporary vehicle essentially to offset that the significant increase in risk and volatility that’s going to come up in individual markets associated with COVID-19.
ROI: Let’s do more on costs. Hospitals recently got permission to do more non-essential surgeries and procedures. This is big for them, as it is a huge source of revenue. Is that the case with Horizon — do these procedures impact your bottom line more than other claims?
KC: Our financial realities are different from those of a hospital. The costs associated with inpatient care for us are actually the smallest segment when compared to the cost associated with outpatient activity, physician services and pharmaceuticals. For every dollar we spend in medical cost, 17% goes to paying for inpatient care, which is less than prescriptions at 20%, outpatient care at 21% and physician services at 31%.
I think it’s also important to note that some of the drop in these elective procedures are just a snapshot in time. There’s going to be a significant increase in medical costs starting in the second half of the year.
ROI: And you’ll likely be handling much of this increase with employees who are working remotely. How has the switch to work-from-home impacted your ability to operate at a time you are busier than ever?
KC: We were close to 40% work-from-home even before COVID-19. It’s a concept that we’ve been comfortable with and somewhat practiced at. We shifted to essentially 99% of our 5,500 employees virtually overnight on March 17. Our team has done a fantastic job with the with the transition. Our service metrics, our performance rates, things like how quickly we answer a call, how often we resolve a problem the first time someone calls, how quickly we process and pay a claim, are all coming in at the same high levels we operated at before the onset of COVID-19.
As I suspect is the case for most employers, this shift and, frankly, our performance, have given us some new insights to digest about how we service our members and how we function in the most efficient and, I am going to say, safe way. I think this is something that’s going to become more of a human resource issue over time and a consideration as it relates to the work from home as being an effective model.
ROI: That begs the question: Could you ever see a time when this is a permanent move and you no longer need your headquarters in Newark?
KC: No, not at all. I don’t think there will ever be a substitute for a headquarters, because I think the face-to-face collaboration and the cross-functional integration comes with it are going to continue to be integral to success — and something you just can’t accomplish on Zoom or on a telephone call.
We’ve been a Newark-based company for almost 90 years now and that’s not something that we intend to change. Having said that, we — like all other employers — are trying to digest the implications of what we’ve learned here and figure out what our path forward is going to be.