Utah's commercial health insurance market is "struggling" under the weight of higher medical care costs, fewer commercial insurance plan customers and narrow profit margins for even the most stable commercial insurance companies, according to a new report from the state Insurance Department.
In its "2003 Health Insurance Market Report," the department uncovered four changes it called significant.
During the 1999-2002 period, the number of comprehensive health insurers fell by 28 percent. This, according to department research analyst Jeffrey E. Hawley, was due in large part to smaller, secondary insurers leaving the market.
Though the smaller insurers may not have had the wherewithal to compete, Hawley said, "we still have strong providers in the market providing services, and those providers are stable."
Comprehensive health insurance premiums jumped 31.7 percent during the past four years. Though the increase is noteworthy, Hawley said, it corresponds with a broader, steeper national trend.
A Kaiser Permanente Employer Health Benefits survey found that the average premium for an individual group employer policy is $255 per month. In contrast, Hawley said Utah's average premium is $133.
The number of Utah residents covered by comprehensive health insurance declined by 6.63 percent during the four-year study period. However, Hawley said the state has no proof that
fewer Utahns are insured. It may mean that they are covered by employee- or self-funded plans, he said.
Over the past eight years, the top commercial insurers have lost an average of .08 percent of their annual net income. The study attributed the loss to higher medical care costs.
J. Kevin Bischoff, spokesman for BlueCross BlueShield of Utah, agreed that commercial insurers are pulling their belts ever tighter. Though BCBS doesn't technically register "profits" (it is a non-profit provider), the amount the company placed in reserves has declined, Bischoff said.
"The amount that went into our reserves was about 1.5 percent of our total revenue," he said. "Some people seem to think that because they see premiums going up, insurers are raking in the money. Our premium increases are a true reflection of what's happening to the cost of health care. Ninety cents of every dollar we bring in is paid back out in claims."
On the brighter side, Hawley said that customer complaints about health insurance have declined, and the rate of uninsured persons is still below the national average.
"We're OK," he said. "We do have these trends of fewer insurers, fewer commercially insured, rising premiums and narrow financial margins that are of concern to us. But that doesn't mean that the market is necessarily in trouble. It just means we have to watch it and see if the trend continues."