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Home / News & IndustryManaged Care Insight and Analysis
Updated: April 13, 2010
Health Plans Feel Effects Of Tough Economy As Membership Levels Drop

The nation’s continuing economic problems and major decreases in employment across the country is being reflected in drops in health plan enrollment or membership and reports of financial losses for the companies for the third quarter of this year, according to the results of a review by The Managed Care Information Center.

UnitedHealthcare reported losing 80,000 members served through fee-based programs and 195,000 people in its risk-based health benefit plans, the company reported.

"Reflecting the challenging economic climate, employment attrition at continuing clients was the most significant factor in these decreases, accounting for more than 80 percent of the total third quarter decline," the health plan said.

However, the company reported growth in its Medicare Advantage programs of 30,000 people and year-to-date growth of 275,000 members.

Through the end of the third quarter, United’s membership or enrollment totaled 70.345 million persons.

CIGNA reported that its third quarter results were in line with company expectations at just over 11 million members. "Risk membership was stable in the quarter driven by ongoing growth in our individual membership and demand for our leaner risk products," the company said.

CIGNA said it continued to expect its medical membership to decline by approximately 5 percent to 5.5 percent. "High unemployment levels have driven higher disenrollment which accounts for the majority of our membership losses," said David Cordani, president and COO.

Wellpoint said its medical membership was 33.9 million at the end of the third quarter, a decrease of 1.5 million members, or 4.2 percent, from 35.3 million for the same quarter in 2008. "We are performing well as an organization in a difficult economic environment. Our third quarter results were better than we expected, driven mostly by improving results in our consumer segment," said Angela F. Braly, president and CEO of WellPoint.

Health Net reported a third quarter 2009 net loss of $66 million. Jay Gellert, president and CEO of Health Net, said overall commercial enrollment decreased due to in-group losses driven by the economy. He noted, however, that the company continued to produce "strong new commercial sales in targeted segments" and products in its Western health plans and its Medicare plans continue to meet expectations.

Humana bucked the tide reporting that revenues rose 8 percent to $7.72 billion from $7.15 billion in for the same period in 2008. While the company saw growth in its Medicare Advantage products, it said that its commercial segment medical membership declined to 3.427 million for the end of the third quarter, down 127,100, or 4 percent, from 3.554 million for the same period in 2008 and a drop of 193,900, or 5 percent, from 3,620,800 at year end 2008.

Humana said the decline during 2009 "primarily reflected the impact of the economic recession andincreased unemployment" across the company’s various fully-insured group medical lines.

"The health insurance industry continued to see deterioration in membership through Sept. 30, with most of the leading health plans experiencing membership losses," reported industry experts Mark Farrah Associates. "Year-over-year total membership for the eight leading plans decreased by over 1.7 million members, or -1.3 percent, from 133.2 million in the third quarter of 2008 to 131.5 million for the third quarter of 2009," the firm said in its Healthcare Business Strategy report.

Address: Mark Farrah Associates, 16 Ridgewood Circle, Kennebunk, ME 04043; (207) 985-8484

  This article was taken from:
The Executive Report on Managed Care

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