Do a little research into the 2020 pandemic and health insurance, and all you read are people saying that health insurance prices will climb, and how small businesses are going to cancel their health insurance policies. Yet, much of what you read is very reactionary and very short sighted. In truth, if you look at the macroeconomics of things like the oil trade and the global stock market, then the bleak view people are taking is absurd. 

Oil Prices Hit a New Low in 2020

The thing about oil is that you cannot just turn off the oil pumps. They keep producing no matter how much demand is present. Countries like Australia took their chance and started buying stockpiles of oil, which helped to stop the descending prices, but still we saw a massive drop in oil prices because the global pandemic and subsequent lockdowns removed the demand. Even now, there are massive stockpiles of oil that are likely to keep oil prices low for months to come.

The Stock Market Bounces Back

During the 2020 lock down, most businesses projected around a 20% loss of market value, and most of them were right. But the pandemic and subsequent loc down are not market factors on their own. All they can do is temporarily pause an economy or a stock price. It is not a market force like a minimum wage hike, or new tax. It is something that stops having an effect as soon as it is over. The bounce back was already seen in 2020, when global stocks hit a world record in terms of organic growth. Take the example of the FTSE 100 The 2020 lockdown was devastating but look at how easily and organically it started to recover.

How Will Macroeconomics Affect Medical Health Prices?

You have to look at how the 2020 pandemic affected the stock market and the oil industry, and consider which conditions exist within the health insurance and pharmaceutical profession. 

For starters, people in the pharmaceutical manufacturing industry are considered key workers (important) and have typically been allowed to continue work unhindered around the world. Add to this that pharmaceuticals are also stockpiling drugs, sometimes because it will save them money in the long run, and sometimes because certain medication cannot simply stop growing, maturing, creating, without completely destroying the supply chain. There are now global stockpiles of everything from bandages to advanced cancer medication. Stockpiles means cheaper prices in the future, which health insurance companies are going to enjoy.

Health Insurance Claims Have Hit An All-Time Low

When people talk about insurance companies suffering, it is actually life insurance companies that suffer during global pandemics, and even then, their wounds seem mostly self-inflicted. This is true because despite the numbers of people dying from COVID, the number of people killed at work, or in cars, or even in restaurants after choking on food, had dropped dramatically during the pandemic and lock down. Health insurance claims for kids were dramatically down too since there were fewer chances for them to get into scrapes, and/or become ill.

Health insurance claims went down similarly because of the global pandemic and lockdowns. Not only were people mostly out of harm's way, on the streets, at work, etc., but people were also far more germ conscious. As a result, incidences of regular bacterial and viral infections were dramatically down during the 2020 pandemic. 

Savings On Two Fronts

Health insurance companies have saved money on two fronts. Not only will they find it easier to negotiate with pharmaceutical companies over prices, but they have also saved a lot of money on claims during the 2020 pandemic. Sure, the cost of treating people with Covid was tough, but said people were typically already ill and on a lot of medication anyway. Plus, as morbid as it sounds, some of the seriously ill people who were costing the health insurance companies thousands are the ones most likely to die if they contract Covid, which means health insurance companies save money again.

Conclusion - When Health Insurance Companies Save Money

Since the health insurance companies have saved so much money during the 2020 pandemic, it is most likely that they are going to start cutting costs in years to come. The only flip side is that many businesses may have canceled their health insurance policies during the 2020 pandemic through uncertainty about the future. 

At first, this seems like a downside for people wanting to save money on health insurance, but you have to remember that businesses will recover and new businesses will take over from the ones we lost. That means there are old companies that will be looking to buy health insurance again, and new companies looking to buy health insurance again. This is going to spur the health insurance industry into a competitive frenzy where prices will be slashed again and again just to undercut the competition. In short, it is yet more reason why health insurance prices will go down after the 2020 pandemic, and why prices are likely to stay low for the coming years.