Insurers Take In Record Profits as U.S. Residents Spend Less on Care
Major U.S. health insurers are posting record profits for the third year in a row, largely because residents are postponing or forgoing care as the country recovers from the economic recession, the New York Times reports.
According to the Times, the trend could be "signaling the possibility of a fundamental change in Americans' appetite for health care."
The largest insurers have reported first-quarter earnings that beat analysts' projections by an average of 30%, the Times reports.
Many medical experts say patients have remained very conscious of their health spending following the economic downturn, which could lead them to be more selective of the type of care they receive. In addition, businesses have raised deductibles and copayments and reduced benefits for many employer-sponsored health insurance plans over the past few years, which might cause plan members to delay or skip care.
However, even as profits increase, insurers continue to push for higher premiums, citing the higher costs of care and the belief that demand for care will increase later this year as the economy improves.
Lonny Reisman, chief medical officer of Aetna, said, "I think there's a real concern about a bounce-back, a rebound, in utilization."
Some experts believe the companies are trying to raise premiums before stricter regulations are enacted under the federal health reform law, such as a requirement that companies cover individuals with pre-existing conditions.
Others believe that "significant increases" in out-of-pocket health care costs could "prevent a solid rebound," the Times reports (Abelson, New York Times, 5/13).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.