amerigroup health insurance
Medical costs associated with swine flu are beginning to mount, causing health insurance companies to experience much-higher-than-usual coverage expenses.
It’s too early to tell what impact the increased costs will have, but if the virusHundreds lined up outside an H1N1 flu shot clinic in Worcester, Mass. last week. Insurers’ costs are rising as the number of people seeking treatment for the flu increases. Connecticut has had just more than 2,000 confirmed cases of the swine flu. continues to escalate, it could contribute to higher rates for consumers.
So far in Connecticut, there have been about 2,100 confirmed cases of swine flu, which has led to about 170 hospitalizations. Nationwide, the Centers for Disease Control and Prevention recently released a study that said as many as 5.7 million Americans were infected with swine flu during the first few months of the pandemic.
As more people get the virus, it’s driving up emergency room visits, trips to the doctor’s office and medication needs, leading to higher medical costs for insurers.
Ethan Slavin, a spokesman for Hartford health insurer Aetna, said the “typical” flu season results in about $65 million in claims expenses for the company each year. This year, however, the company is projecting its claims costs will balloon to $160 million, or $95 million higher than normal because of the H1N1 virus.
The company saw greater-than-anticipated costs from H1N1 in the third quarter, causing its commercial medical benefit ratio, which measures medical costs as a percentage of premium revenues, to grow to 85.6 percent, from 80.3 percent a year ago.
Despite the headwinds, however, Aetna reported an 18 percent jump in profits during the quarter, earning $326.2 million, thanks to improved investments.A child is administered the swine flu spray at a Worcester, Mass. clinic.
When asked how the increased swine flu costs would impact rates, Slavin said its “premature to speculate on any consumer impact,” adding that the company’s “rate settings take into account plan design, size of the risk pool and many other factors.”
Managed-care company UnitedHealth, which has major operations in Hartford, estimates that it will incur incrementally about $50 million in H1N1 flu related costs this year.
The company said it expects flu spending to continue to rise in the fourth quarter.
“We have a tremendous amount of resources focused on monitoring our costs and mitigating them as best we can but also responding to the needs of customers,” said Mary McElrath-Jones, director of public relations at UnitedHealth. “We have had a pretty good handle on these costs throughout the course of this year and have provided for them in the fourth quarter.”
UnitedHealth saw its third-quarter profits jump 13 percent to $1.04 billion, as enrollment declines and swine flu costs were offset by growth in some of the company’s other business lines.
James G. Carlson, chairman and CEO of Virginia-based health insurer Amerigroup, said the single most important driver of increased medical costs for his company over the last 30 days has been the “onset of what appears to be a severe flu season due to the H1N1 virus.”
Amerigroup’s profits sank 41 percent in the third quarter as the H1N1 virus drove up emergency room and physician services.
The flu could also potentially impact state Medicaid programs, depending on the severity of the outbreak.
In Louisiana, the state’s Medicaid program is more than $250 million over budget, with swine flu related costs contributing to more than $100 million of the deficit.
David Dearborn, a spokesman for Connecticut’s Department of Social Services, said it is unclear at this point how Connecticut will be affected.
He did say that medical costs for the Medicaid portion of the state’s Husky program, which serves about 340,000 children, youths, pregnant woman and eligible parents, is borne by the contracted insurance companies.
He said the state pays a flat ‘capitated’ per member/per month rate that is determined in large part through actuarial analysis.
In the non-Husky Medicaid program, however, which covers 80,000 elderly and citizens with disabilities, the state pays medical costs on a fee-for-service basis.
“Inordinate flu-related medical claims could have a budgetary impact on a more immediate basis,” in that program, Dearborn said, but DSS has not projected it yet.
To combat higher costs, insurers have been active in trying to prevent their customers from getting the virus.
Connecticut health insurers Aetna, Anthem Blue Cross, Cigna, ConnectiCare and UnitedHealth are all covering administration of the swine flu vaccine for some or all of their members.
William Fried, a medical director for Aetna, said the company has also activated a pandemic flu plan that it developed in 2005.
The plan includes a comprehensive communication campaign to promote prevention, as well as appropriate treatments.
The company has also removed barriers from their members getting the flu vaccine, offering first-dollar coverage of the vaccine for their fully insured health plan, and members of self-funded plans.
More than 76,000 Aetna customers have received the vaccine, including about 10,000 per day recently, Fried said.
Medical costs associated with swine flu are beginning to mount, causing health insurance companies to experience much-higher-than-usual coverage expenses.
It’s too early to tell what impact the increased costs will have, but if the virusHundreds lined up outside an H1N1 flu shot clinic in Worcester, Mass. last week. Insurers’ costs are rising as the number of people seeking treatment for the flu increases. Connecticut has had just more than 2,000 confirmed cases of the swine flu. continues to escalate, it could contribute to higher rates for consumers.
So far in Connecticut, there have been about 2,100 confirmed cases of swine flu, which has led to about 170 hospitalizations. Nationwide, the Centers for Disease Control and Prevention recently released a study that said as many as 5.7 million Americans were infected with swine flu during the first few months of the pandemic.
As more people get the virus, it’s driving up emergency room visits, trips to the doctor’s office and medication needs, leading to higher medical costs for insurers.
Ethan Slavin, a spokesman for Hartford health insurer Aetna, said the “typical” flu season results in about $65 million in claims expenses for the company each year. This year, however, the company is projecting its claims costs will balloon to $160 million, or $95 million higher than normal because of the H1N1 virus.
The company saw greater-than-anticipated costs from H1N1 in the third quarter, causing its commercial medical benefit ratio, which measures medical costs as a percentage of premium revenues, to grow to 85.6 percent, from 80.3 percent a year ago.
Despite the headwinds, however, Aetna reported an 18 percent jump in profits during the quarter, earning $326.2 million, thanks to improved investments.A child is administered the swine flu spray at a Worcester, Mass. clinic.
When asked how the increased swine flu costs would impact rates, Slavin said its “premature to speculate on any consumer impact,” adding that the company’s “rate settings take into account plan design, size of the risk pool and many other factors.”
Managed-care company UnitedHealth, which has major operations in Hartford, estimates that it will incur incrementally about $50 million in H1N1 flu related costs this year.
The company said it expects flu spending to continue to rise in the fourth quarter.
“We have a tremendous amount of resources focused on monitoring our costs and mitigating them as best we can but also responding to the needs of customers,” said Mary McElrath-Jones, director of public relations at UnitedHealth. “We have had a pretty good handle on these costs throughout the course of this year and have provided for them in the fourth quarter.”
UnitedHealth saw its third-quarter profits jump 13 percent to $1.04 billion, as enrollment declines and swine flu costs were offset by growth in some of the company’s other business lines.
James G. Carlson, chairman and CEO of Virginia-based health insurer Amerigroup, said the single most important driver of increased medical costs for his company over the last 30 days has been the “onset of what appears to be a severe flu season due to the H1N1 virus.”
Amerigroup’s profits sank 41 percent in the third quarter as the H1N1 virus drove up emergency room and physician services.
The flu could also potentially impact state Medicaid programs, depending on the severity of the outbreak.
In Louisiana, the state’s Medicaid program is more than $250 million over budget, with swine flu related costs contributing to more than $100 million of the deficit.
David Dearborn, a spokesman for Connecticut’s Department of Social Services, said it is unclear at this point how Connecticut will be affected.
He did say that medical costs for the Medicaid portion of the state’s Husky program, which serves about 340,000 children, youths, pregnant woman and eligible parents, is borne by the contracted insurance companies.
He said the state pays a flat ‘capitated’ per member/per month rate that is determined in large part through actuarial analysis.
In the non-Husky Medicaid program, however, which covers 80,000 elderly and citizens with disabilities, the state pays medical costs on a fee-for-service basis.
“Inordinate flu-related medical claims could have a budgetary impact on a more immediate basis,” in that program, Dearborn said, but DSS has not projected it yet.
To combat higher costs, insurers have been active in trying to prevent their customers from getting the virus.
Connecticut health insurers Aetna, Anthem Blue Cross, Cigna, ConnectiCare and UnitedHealth are all covering administration of the swine flu vaccine for some or all of their members.
William Fried, a medical director for Aetna, said the company has also activated a pandemic flu plan that it developed in 2005.
The plan includes a comprehensive communication campaign to promote prevention, as well as appropriate treatments.
The company has also removed barriers from their members getting the flu vaccine, offering first-dollar coverage of the vaccine for their fully insured health plan, and members of self-funded plans.
More than 76,000 Aetna customers have received the vaccine, including about 10,000 per day recently, Fried said.
