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November 14, 2009
HMOs said to be planning significant 2010 premium increases despite strong 3Q earnings.
Forbes (11/4, Whelan) notes that although "most of the major managed-care companies" have announced strong 3Q results, the message "during this earnings season is that HMOs are focused on rebuilding margins, even if it makes insurance even less affordable."
Goldman Sachs analyst Matthew Borsch "calls it 'the highest pricing trend in years.' The premium increases he's seeing are in the neighborhood of 13 to 15 percent for next year." Analysts say HMOs are concentrating on making up for operating profit margins, which "reached zero last year for the industry as whole."
Moreover, the companies not only want recompense for the "higher costs" they incurred this year from COBRA, they must "cover rising ordinary medical costs that show no signs of slowing down." Barclays analyst Joshua Raskin predicts overall health spending in 2010 will "climb 9 percent."
Related Links:
- Why Health Insurance Charges Are Going Up," David Whelan, Forbes, November 3, 2009.
Posted by admin at November 14, 2009 06:21 PM