Mercury News Examines Impact of Economic Downturn on Smaller Health Insurers, Physician Groups
The San Jose Mercury News yesterday examined the impact of the economic downturn on health insurers in California, saying that it could lead to a loss of health care for individuals with health insurance. As a result of the economic downturn, large health insurers have taken business from "small, regional and well-regarded insurance plans" such as San Jose-based Lifeguard. The Department of Managed Health Care earlier this month assigned a conservator to take control of Lifeguard after the not-for-profit HMO failed to meet state solvency requirements. The economic downturn also may force businesses to offer fewer health plans to their employees, "squeezing out" smaller health insurers, the Mercury News reports. In addition, layoffs have cost tens of thousands of state residents their health insurance, leaving some regional health insurers and physician groups, such as San Jose/Good Samaritan Medical Group in South Bay, with fewer patients and less revenue. As a result, some regional health insurers and physician groups may file for bankruptcy, close or leave the state, reducing access to care, the Mercury News reports. Helen Halpin Schauffler, a professor of health policy at the University of California-Berkeley, said, "Things are getting worse and worse, threatening the financial viability of medical groups and hospitals, who were barely surviving in a managed care environment." Larry Levitt, vice president of the Kaiser Family Foundation, added, "We've been hit with a double whammy of rising health care costs and a declining economy, neither of which are good for health insurance plans or medical groups" (Krieger/Sevrens Lyons, San Jose Mercury News, 9/22).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.