UnitedHealth Group, one of the nation’s largest health insurers, reported its second-quarter results on Tuesday, and the good news for the industry looked as if it was likely to continue.
The company announced a double-digit increase in profits and raised its estimates for what it thought it would make for 2011, according to the company’s news release.
Once again, the high profits of the insurers appear to be partly the result of more budget-consciousness by their customers, even as the insurers ask for higher premiums. Many Americans seem to be putting off or forgoing medical care because of the weak economy and the increasing amount they are required to pay in medical bills as their deductibles and co-payments climb, as I wrote in a front-page article in May.
At the time, many health insurers insisted it was too soon to tell whether utilization would eventually rebound to the same levels as before the economic downturn. They argued that they could not count on the demand for medical care staying at relatively low levels.
Even now, UnitedHealth executives say they expect people to start using health services much more the way they did before the recession than they are currently. “We expect pressure on UnitedHealthcare’s gross margin percentage in the second half of 2011 and into 2012, due to increasing rate pressure from government customers and more overall normal utilization trends,” UnitedHealth’s chief executive, Stephen J. Hemsley, told analysts and investors.
Are the insurers right? Do you think once the economy rebounds people will be as quick to agree to a costly medical test or procedure? Will they start going to the doctor more? Or have high deductibles and co-payments changed the way people think about medical care?
Article source: http://feeds.nytimes.com/click.phdo?i=0acaba22154e2743432e1910e5349546
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