While patients grapple with runaway costs and the indignities of the U.S. healthcare system, the largest health insurance firms posted solid year-over-year earnings growth for the first half of 2022. In fact, experts don’t think they’ll struggle at all despite worrisome economic conditions.
These same experts also believe insurers with diverse revenue streams will stay strong as they absorb the impacts of lower enrollment as a result of inflation; rising medical costs; a possible recession, which could reduce employer-based enrollment; and the resumption of Medicaid eligibility redeterminations.
Why the disparity between insurers and the insured?
The answer is two-fold, according to Ge Bai, Ph.D., a professor at Professor at Johns Hopkins Carey Business School and Johns Hopkins Bloomberg School of Public Health.
In an interview with AIS Health, Bai points out that “insurance companies, because of their market position, are able to pass on inflation impacts to their end consumers.” Plan sponsors and ultimately, their members, bear the brunt of higher costs while insurers pocket greater profits.
Bai also articulates what many hesitate to say… that insurance companies “have pretty much captured customers. It’s not a very competitive market.” With little competition and no incentive to change current business practices, the greed and inequity will surely continue.
Employers and plan sponsors cannot rely on monopoly legacy insurance companies to care about their best interests. They need to take a more progressive approach and find an employee health plan that does care, especially with today’s rising inflation and the possibility of recession.