Largest U.S. Health Insurers Report Lower Earnings, Decrease in Plan Members During Recession
The nation's largest health insurers are reporting lower earnings and decreases in plan memberships, suggesting that more people are uninsured as the economic recession continues, the Wall Street Journal reports.
WellPoint, the country's largest health insurer, said that it has lost nearly 500,000 net members since the end of December 2008 and that 325,000 of those members lost coverage because of layoffs or because workers opted out of employer coverage. The company on Wednesday reported a 1.3% decrease in first-quarter net income. Ken Goulet, head of WellPoint's commercial division, said, "We haven't run into something like this before." However, WellPoint President and CEO Angela Braly said she expects both the unemployment rate and the decrease in health plan members to moderate.
UnitedHealth Group, which has the second-largest health plan membership in the U.S., reported that commercial health plan membership declined by 900,000 people in the first quarter, compared with the end of last year. Much of the decline was caused by higher-than-expected layoffs at the insurer's employer clients, the company said. UnitedHealth President and CEO Stephen Hemsley on Tuesday said that the company could lose up to 1.5 million commercial health plan members this year if the average rate of unemployment reaches 10% by December.
According to an analysis from the Kaiser Family Foundation's Commission on Medicaid and the Uninsured, the number of uninsured residents increases by 1.1 million people for every one percentage point increase in the unemployment rate. The Foundation estimates that of the nine million people expected to have lost employer-sponsored coverage, about four million are uninsured.
Hospitals also have said that they are seeing indicators that more people are uninsured. Tenet Healthcare earlier this week said that the number of admissions for patients with private health insurance dropped by 2% in the first quarter, compared with a year earlier. Also, it reported that outpatient visits of insured patients fell by .4% (Fuhrmans, Wall Street Journal, 4/23).