Posts Tagged - ‘unitedhealth’

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Do Health Insurance Stocks’ Profits Hurt Patients?

Friday, October 15th, 2010

Image: kevinzhengli under CC 3.0

According to financial analyst Sarah James, the health insurance industry is a great investment. Profits are estimated to be higher in the third quarter of 2010, so firms like Aetna, Coventry, UnitedHealth, WellPoint, and Humana have had their price targets increased.

Unfortunately, what is positive for stockholders may not be as good for health insurance plan customers. One of the reasons for lower costs is a milder flu season than expected, which is obviously good for everyone. Increased enrollment is another explanation, which is generally neutral. Another, more worrying, factor is price increases.

Lower usage rates of costly inpatient hospital services could go either way: if the decline is because patients are truly becoming healthier and don’t need them, that’s great. However, if it is a result of insurers forcing patients into outpatient care before they are ready to cut their costs, it is not a good sign for consumers.

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Individual Health Insurance Coverage Denials Rose Since 2007

Thursday, October 14th, 2010

Image: Oldmaison under CC 3.0

Over the past two years (ending in 2009), four major health insurers’ rates of denying coverage to individual health insurance plan applicants rose by 50%.

A report from the House of Representatives Energy and Commerce Committee claims that WellPoint, Aetna, UnitedHealth, and Humana purposely refused to sell coverage to over 600,000 people with pre-existing conditions. Up to 425 health conditions could disqualify a person from coverage under one insurer, and some would not conduct further internal review before denying coverage.

On the one hand, the insurers may have seen the writing on the wall when President Obama was elected, and wanted to maximize their profits as much as possible before regulations would limit their ability to discriminate based on pre-existing conditions.

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