Managed Care - June 2008 - (Page 26)

Health plans are diversifying by offering HSA/HDHPs a market that is experiencing a significant drop T o survivetoinhealth savingshealth care coverage, healthhealth in employer-sponsored plans are turning account/high-deductible plans (HSA/HDHPs). A recent census by America’s Health Insurance Plans (AHIP) of insurance carriers shows that the number of people covered by these plans was 6.1 million in January 2008, up nearly 25 percent from last year. The fastest growing market for HSA/HDHP products was small-group coverage. In the individual market, consumers selected HSA/HDHP products for 27 percent of their new purchases of health insurance. And HSA/HDHP products accounted for 31 percent of new coverage in the small group market Among other trends: • • • 46 percent of all individual market enrollees were age 40 or older. 97 insurers reported coverage in HSA/HDHP products 66 of these companies reported HSA/HDHP enrollment in the individual market; 88 companies had HSA/HDHP enrollment in the small-group market; and 89 companies had enrollment in the large-group market. 14 companies responding to the census had HSA/HDHP enrollment of more than 100,000 covered lives (including dependents) in January 2008. 37 companies had HSA/HDHP enrollment of more than 25,000 people and 62 companies reported HSA/HDHP enrollment of more than 5,000 people. • • Percentage of lives covered by an HSA/HDHP, by market type As enrollment in these plans grew from 1 million in 2005 to 6 million in 2008, buyers of group policies became more comfortable with the idea. Most policies were sold on the individual market in 2005, but now, large groups are well represented and account for 45 percent of policies. Individual 100% Small-Group Large-Group 19% 80% Percentage 60% 40% 20% 0 March 2005 Source: AHIP 17% 33% 25% 49% 45% earnings per share, which deflates market value — a vicious cycle that occurred last year, although health insurers generally reported steady earnings. Poor service and drops in enrollment also take their toll. UnitedHealth is a good example. Over the last year the company “has become a lightning rod for sometimes scathing complaints from patients, health-care providers and state regulators,” according to a recent article in the Wall Street Journal. In December, UnitedHealth told investors that it lost 315,000 enrollees last year because of poor customer service. In a conference call with analysts, CEO Stephen Hemsley said the company would continue to lose customers into the first quarter of this year, primarily as the result of alienating doctors and customers by pushing too hard to integrate PacifiCare, which it bought in 2005. Hemsley said the company would need a year to improve service by resolving billing issues and paying doctors more quickly. Its stock dropped 37 percent in the first quarter. Goldman Sachs reported in January that UnitedHealth received “the most negative comments by far” during meetings with national employers, who cited service lapses, lack of responsiveness and turnover among account managers, inability or unwillingness to meet customization requirements, and poor integration of ancillary offerings, according to the Journal. (By the end of May the company began to recover from its April low, but it remains far from its value at the end of last year.) 64% 25% 42% January 2006 30% 25% January 2008 26% January 2007 Hardly alone UnitedHealth has not been alone in its troubles, of course, and its $75 billion in revenue last year will help see it through this rough patch, and so will the fact that it has the second biggest enrollment after WellPoint. 26 MANAGED CARE / JUNE 2008

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Managed Care - June 2008 Editor’s Memo Contents Viewpoint Letters News and Commentary Legislation & Regulation Medication Management Compensation Monitor Plans Chart Course in Rough Waters A Conversation With Barbara Starfield, MD Smoke Signals from Payers Slow Going for Clinical Decision Support Back Pain and Physical Therapy Formulary Files PlanWatch Outlook

Managed Care - June 2008

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