Insuring the Future: Health Plans Respond to the Financial Crisis
Global Institute for Emerging Healthcare Practices
As the general economic crisis deepens, health plan and payer industry observers caution that demand for health insurance products continues to soften, as government funding declines, critical economic and industry segments falter and fail, unemployment rises, and small employers struggle to remain solvent through the downturn.
This paper provides an overview of findings from a November 2008 survey of 30 health plan executives about the impact of the current financial downturn on their business. The mostly C-level executives were concerned about the general erosion of enrollment levels, continuing healthcare cost inflation and the declining value of their corporate investment portfolios. Unemployment levels are a significant concern as executives foresee continued downturn in the small group business segment as economic uncertainty forces small employers to cut healthcare costs, and all employers implement lay offs and other cost containment measures.
Health plan executives are optimistic about government-sponsored programs, like Medicare and Medicaid - if government funding is available. They also see growth in consumer-directed products. Survey respondents retain tight discipline around cost control and reduction while at the same time looking for innovative and creative approaches to maintain momentum on critical initiatives.
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