Attention buyers: rate changes likely as health plan profits dip
Health plans have been reporting their first quarter results and it is not a pretty picture. From large national plans like United Healthcare to small plans like Neighborhood Health in Boston, insurers have been beset by an unexpected event: an improvement in treatment for patients. New drugs for Hepatitis C have finally made the market after years of development, and the cost per patient can approach $100,000. For years, Hep C patients have had inadequate treatment for the disease, leaving thousands waiting for the new drugs and causing demand to surge.
The good news is that the new drugs work. The bad news is that the costs are sending insurance results to the tank and we have only seen one response to this problem before: higher health insurance rates.
Rates are also likely to rise as a result of added claims payments billed to hospitals earlier in the year. Industry analysts expect more answers as to how these revenue changes will impact the market by the end of the summer, and WGA will continue to keep you informed on the latest developments of this issue as they unfold.
About the Author
Phil Edmundson is the Chairman and CEO of William Gallagher Associates, insurance brokers and consultants for businesses with over 30 years in the insurance industry. He manages strategy, talent acquisition and development, and management / acquisitions at WGA.