In­sur­ers: en­roll­ment blues

Modern Healthcare - - Special Report -

Con­tin­ued high un­em­ploy­ment in 2010 would keep pres­sure on health in­sur­ers to com­pete for valu­able com­mer­cial mem­bers. In the mean­time, health plans will be seek­ing to stave off cer­tain as­pects of health­care re­form, in­clud­ing pro­posed cuts to Medi­care Ad­van­tage, ob­servers say.

An­a­lysts are not op­ti­mistic about the health in­sur­ance sec­tor this year, largely be­cause of un­cer­tainty around health re­form and eco­nomic fac­tors, in­clud­ing un­em­ploy­ment lev­els and ero­sion of rich ben­e­fit pack­ages as busi­nesses seek to cut costs.

“We will be looking at how in­sur­ance com­pa­nies have been able to get out of the eco­nomic cri­sis and how their in­vested as­sets look right now,” says Eva Sverdlova, se­nior fi­nan­cial an­a­lyst at A.M. Best Co., adding it’s too early to know.

The Medi­care Ad­van­tage pro­gram has been a bright spot for in­sur­ers. Since its cre­ation in 2003, some 11 mil­lion se­niors na­tion­wide have en­rolled in th­ese plans. The pro­gram ac­counts for a large part of some in­sur­ers’ rev­enue, yet health­care re­form leg­is­la­tion in Congress seeks to cut fed­eral sub­si­dies to th­ese pro­grams. Re­im­burse­ment re­duc­tions are al­ready set for th­ese plans in 2010, and tight­ened rules for the Medi­care Ad­van­tage pri­vate fee-for-ser­vice plans start­ing in 2010 are caus­ing some in­sur­ers to exit the mar­ket.

Th­ese fac­tors “are ex­pected to make the 2010 mar­ket­ing sea­son more chal­leng­ing for health­care in­sur­ers as they at­tempt to re­tain their cur­rent mem­bers and con­vince new se­niors to buy into one of their Medi­care Ad­van­tage plans,” ac­cord­ing to Joel Levine and Stephen Za­haruk, se­nior vice pres­i­dents at Moody’s In­vestors Ser­vice, in an in­dus­try out­look re­port. “The threat of ad­di­tional fu­ture cuts as con­tained in pro­posed health­care re­form leg­is­la­tion only com­pounds this is­sue.”

—Re­becca Ve­sely

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.