WASHINGTON – Industry experts differ on the degree to which payers – both regional and national – will be negatively impacted by the financial crisis.
Most, however, say a protracted economic downturn will raise the ante for healthcare insurance reform and accelerate new markets.
America’s Health Insurance Plans has been stumping for its healthcare reform proposals addressing covering the uninsured, reducing costs and raising quality, said spokesman Robert Zirkelbach.
“What we’re hearing from individuals and small businesses is that healthcare is too expensive and coverage is difficult to provide, respectively,” he said. “The financial crisis only adds to the urgency of the situation and gives more reason to move forward with healthcare reform.”
Others see the cost of care and the inability to raise premiums in this economic environment pushing payers to look for new business by redesigning products with lower premiums and higher deductibles. “We’re on the cusp of fundamental changes in health plan benefits and headed toward defined contributions to health benefit accounts,” said Carl Doty, senior analyst for Forrester Research. “The industry is moving to a low premium, high-deductible catastrophic-type coverage.”
With medical loss ratios worsening, stock prices tanking for listed payers, revenues dropping and costs going up, payers are “doing poorly,” said John Graham, director of healthcare studies at the Pacific Research Institute. To combat the rise in unemployment and the uninsured, payers need to sell low-priced products in states that don’t regulate their individual health plan market, he said.
A number of health plans are engaging in this strategy. Cigna’s investment portfolio performance “continues to be strong competitively,” said spokesman Christopher Curran. Should companies downsize as a result of the financial impact, Cigna may see a small decline in membership, he said. The payer is advocating the ability for consumers to buy insurance “across state lines (much like banking), so that consumers can get their right product at their right price regardless of where they live,” he said.
“WellPoint continues to have access to the capital currently necessary to operate our businesses,” said Todd Siesky, spokesman for Anthem. The payer has introduced “price-conscious, choice-driven” individual health plans offering basic protection in California, Colorado and Georgia.
Expanding a payer’s individual products is expensive to market and risky at a time when people may not be able to buy, argued George Whetsell, managing director of Huron Consulting’s Wellspring practice. Regional payers that have a large share of the local market and a close relationship with their providers will survive, he said. A payer-provider collaborative strategy, with payers building exclusive networks, may deliver a win-win situation.