Health plans to boost premiums, squeeze providers

As readers know, several leading health plans have taken a profitability beating over the last several months, for reasons that include operational issues, medical costs and losses in the financial markets. WellPoint, for one, missed Wall Street's first-quarter profit estimates by a wide margin, something that made financial analysts more than a bit nervous.

Now, hoping to calm watchers on the Street, industry leaders like WellPoint and UnitedHealth Group are assuring investors that they plan to raise premiums enough to stabilize their income--even if it means losing some members. "We will not sacrifice profitability for membership," WellPoint President and CEO Angela Braly recently told analysts during a conference call. 

At the same time, the plans are promising to use their muscle to get better deals from their provider networks. This vow isn't surprising, given that both the plans and analysts see medical costs as a critical factor in sapping industry profits this year. However, it's not clear that plans like UnitedHealth--already known for extremely aggressive negotiations--can cut reimbursement any further.

To learn more about this trend:
- read this AMNews article

Related Articles:
Fear and trembling in health plan land
Insurer troubles could mean more bad debt for providers
WellPoint profits fall 25 percent during first quarter
UnitedHealth suffers financial setback

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