New York Times
The nation's major health insurers are barreling into a third year of record profits, enriched in recent months by a lingering recessionary mind-set among Americans who are postponing or forgoing medical care.
The UnitedHealth Group, one of the largest commercial insurers, told analysts that so far this year, insured hospital stays actually decreased in some instances. In reporting its earnings last week, Cigna, another insurer, talked about the "low level" of medical use.
Yet the companies continue to press for higher premiums, even though their reserve coffers are flush with profits and shareholders have been rewarded with new dividends. Many defend proposed double-digit increases in the rates they charge, citing a need for protection against any sudden uptick in demand once people have more money to spend on their health, as well as the rising price of care.
Even with a halting economic recovery, doctors and others say people in some regions are still extremely budget-conscious, signaling the possibility of a fundamental change in Americans' appetite for health care.
"I am noticing my patients with insurance are more interested in costs," said Dr. Jim King, a family practice physician in rural Tennessee. "Gas prices are going up; food prices are going up. They are deciding to put some of their health care off."
A patient might decide not to drive the 50 miles necessary to see a specialist because of the cost of gas, he said.
But King said patients were also being more thoughtful about their needs. Fewer are asking for an MRI as soon as they have a bad headache.
"People are realizing that this is my money, even if I'm not writing a check," he said.
For someone like Shannon Hardin of California, whose hours at a grocery store have been erratic, there is simply no spare cash to see the doctor when she isn't feeling well or to get a $350 dental crown she has been putting off since last year. Even with insurance, she said, "I can't afford to use it."
Delaying care could keep utilization rates for insurers low through the rest of the year, according to Charles Boorady, an analyst for Credit Suisse. "The big question is whether it is going to stay weak or bounce back," he said. "Nobody knows."
High deductibles also can be daunting. David Welch, a nurse in California whose policy has a $4,000 deductible, said he was surprised to realize he had delayed going to the dermatologist, even though he had a history of skin cancer. Welch, who has been a supporter of the need to overhaul insurance industry practices for the California Nurses Association union, said he hoped his medical training would help him determine when to go to the doctor.
"I underestimated how much that cost would affect my behavior," he said.
Dr. Rebecca Jaffe, a family practice doctor in Wilmington, Del., said more patients were asking for the generic alternatives to brand-name medicines, because of hefty copayments.
"Now, all of a sudden, they want the generic, when for years, they said they couldn't take it," she said.
The insurers, which base what they charge in premiums largely on what they expect to pay out in future claims, say they still expect higher demand for care later this year.
"I think there's a real concern about a bounce-back, a rebound, in utilization," said Dr. Lonny Reisman, the chief medical officer for Aetna.
Because they say they expect costs to rebound, insurers have not been shy about asking for higher rates. In Oregon, for example, Regence BlueCross BlueShield, a nonprofit insurer that is the state's largest, is asking for a 22 percent increase for policies sold to individuals. In California, regulators have been resisting requests from insurers to raise rates by double digits.