Big health plans lose 190,000 Florida enrollees

South Florida Business Journal–January 16, 2009

by Brian Bandell

The growing unemployment rate drove a loss of nearly 190,000 commercial health plan enrollees at Florida’s largest insurance plans during 2008.

A Business Journal survey of the seven-largest commercial health insurers in Florida found their enrollment totaled 8,768,800 on Dec. 31, down 2.1 percent from 8,958,491 members on the same day the year before. Those companies represent about two-thirds of the total commercial health plan enrollment in Florida.

More uninsured residents have led to more uncompensated care at local hospitals and a surging budget for Florida Medicaid, which has been a target for budget cuts, said Linda Quick, president of the South Florida Hospital and Healthcare Association. That has caused hospitals to cut back on hiring or lay off some non-clinical employees and curb capital spending on big-ticket items, she said.

Health care was one of the few economic bright spots for Florida in 2008, but that may not continue in 2009 if providers can’t find enough paying patients.

UnitedHealthcare had the biggest 2008 decline. Its commercial enrollment of 1,713,700 was a 15.9 percent drop from 2007. United spokesman Roger Rollman attributed the decline to the economic downturn.

The four other nationally owned plans – Aetna, Cigna, Humana and Vista Healthplan – all lost commercial members in 2008. Jacksonville-based Blue Cross Blue Shield of Florida (BCBSF) and Miami-based AvMed Health Plans were the only members of the top seven that increased commercial enrollment.

Jim Repp, VP of sales at AvMed, said the nonprofit company added members by focusing on small- and medium-size employers, which it has not traditionally marketed to. At the end of 2008, AvMed had 234,673 commercial enrollees, up 5.2 percent.

With the economy struggling, companies are shifting more costs to employees, and reducing benefits in an effort to bring premiums down, Repp said. Some companies are slashing wellness and prevention benefits in favor of a short-term savings approach.

“In the marketplace looking for health insurance coverage, premium levels and price have become more important factors, and it is more pronounced in small groups,” Repp said. “It becomes, ‘How many employees do I have to eliminate to keep the coverage?’ and that’s a difficult decision.”

With many smaller companies dropping insurance coverage, AvMed debuted its individual health plans this year.

Even though Humana’s commercial enrollment fell 2.4 percent to 325,000 in 2008, it increased membership in its individual plans, said Tim Love, Humana’s commercial market president for South Florida. This is because of layoffs, more part-time workers and companies that canceled group plans and gave employees cash stipends instead.

“Anytime you have turmoil in the market, there is also opportunity,” Love said.

BCBSF seized on plenty of opportunities in 2008 by boosting its commercial enrollment 4.1 percent to 4.27 million members. Its health saving account and high-deductible products were the top sellers across all business segments, said John Wagner, its director of product management.

The company’s introduction of low-cost plans with limited benefits – such as preventive care without hospital services, or vice versa – also delivered member growth, he said. In July, BCBSF will roll out a plan specifically designed for the nearly 600,000 uninsured residents of Miami-Dade County. With the approval of county government, the plan will offer benefits in a tight network of community providers to keep costs down.

BCBSF is also one of the participants in Cover Florida – the low-cost, limited-benefit health plan for the uninsured approved by the Florida Legislature. Quick said Cover Florida may not pay providers for all services, but it’s “better than nothing.”

Quick points out one potential positive to having a higher uninsured rate: a stronger outcry for health insurance reform – one of President-elect Barack Obama’s priorities.

“People are more likely to be stronger advocates for reform when it’s all of a sudden their health care plan that’s lost,” Quick said.