Health insurers confront dual uncertainties of recession, overhaul

Health insurers' Wall Street prospects remain uncertain as details of the health overhaul have yet to be mapped out, according to a Dow Jones Newswires/The Wall Street Journal brief. "While the federal overhaul of the health-care system could add millions of new members to companies' rolls, it also places new taxes and restrictions on the industry. Unresolved details in the new law add uncertainties, such as a potential requirement for insurers to spend a certain percentage of premiums on medical costs. The changes come as health insurers deal with declining membership rolls due to companies cutting jobs and benefits" (Xu, 7/13).

Meanwhile, "Blue Cross and Blue Shield of North Carolina plans to slash its administrative costs by 20 percent by 2014, as the state's largest medical insurer adapts to health reform and the economic slump," The Charlotte (N.C.) Observer reports. The company's strategy is aimed at improving financial results and keeping premiums down. Blue Cross raised rates for individual members an average of 12 percent this year, but gave some consumers much higher increases" (Wolf, 7/14).

Also, Blue Cross and Blue Shield of Oklahoma has announced it will slash 29 marketing and other administrative jobs by consolidating its support operations for the Southwest region in Texas, the Tulsa World reports. BCBS companies in Texas, Oklahoma and New Mexico are operated by the Chicago-based firm Health Care Services Corp. A company executive said, "While it is never easy to make decisions that affect staffing levels, this move will help us reduce administrative costs and provide our customers with enhanced services during a challenging economy and in the wake of a newly reformed health care environment" (Winslow, 7/13).

---

This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.