WellPoint Profits Decline
However, the Associated Press reports on a trend that has led some insurers to increase profits and may now also give consumers a break from premium hikes.
Los Angeles Times: WellPoint Posts 3% Profit Decline
Health insurance giant WellPoint Inc. said its profit fell 3 percent in the second quarter partly because of higher-than-expected medical costs for seniors, particularly in Northern California. The nation's second-largest insurer by membership said it earned $701.6 million in the three months that ended June 30, down from $722.4 million a year earlier (Helfand, 7/28).
Reuters: Medicare Weighs On WellPoint; Other Insurers Down
Health insurer WellPoint Inc said surprisingly high medical claims from a Medicare plan serving the elderly in California would hurt its profits this year, and its shares fell 5.1 percent on Wednesday. Shares of other insurers with significant Medicare business were also down as analysts said investors were additionally concerned the budget deficit talks could lead to legislation that hurts Medicare reimbursement. WellPoint's setback, which it said would be isolated to 2011, comes as the No. 2 health insurer by market value charges into Medicare and challenges more established companies in the field, UnitedHealth Group Inc and Humana Inc (Krauskopf, 2/27).
The Associated Press/Washington Post: Health Care Use Trend That Has Helped Insurers May Also Temper Hikes For Customers
Consumers may catch a little break when their health insurance policies renew. Lower-than-expected use of health care has helped push insurer earnings higher and that may temper how much they increase premiums. Analysts and industry observers say people tend to hold off on elective surgeries or skip doctor visits after a deep recession, and that makes utilization grow more slowly. Insurers consider this trend when they determine what they will need to collect in premiums to cover future claims, and employers likely will use it as a bargaining chip when they negotiate prices of the plans that cover their workers (7/27).
Denver Post: Health Insurers Seek To Cut Unnecessary ER Visits, Costs
When Steve Potts burned his arm on a bad propane tank at his barbecue, he started making the kinds of choices that would earn him a medal of honor from insurance companies. Potts convinced the paramedics, who checked first for lung damage, then sent him with his wife for a quicker and cheaper solution. Insurance companies and medical officials say one in every five ER patients should be a Steve Potts: Up to 20 percent of ER visits could be diverted to less-expensive retail health care sites if patients learned about their choices. To make that happen, insurers are stepping up their efforts - using everything from financial incentives to Internet ads - to encourage patients to take advantage of less-costly alternatives (Booth, 7/28).
