Trends in Membership of Utah Health Insurance Plans

Trends in the number of members. Since 1999, the number of residents insured by comprehensive health insurance as a relative percentage of Utah's total population has declined by more than 12 percent. During this same time period Utah's population has increased by more than 26 percent.

From 1999 to 2007, the individual and small group markets have increased overall, generally maintaining their relative distribution in Utah's population, while the conversion and large group markets have declined. The largest change occurred in the large group market, which declined by nearly 13 percent. Most of these changes occurred between 1999 and 2002. During 2003, the decline in membership stopped and increased slightly from 2002, however, another decline in membership occurred in 2004, followed by increases from 2005 to 2007.

Most of the increase occurred during 2006, with comprehensive health insurers reporting an increase of over 38,000 members in the comprehensive market. The majority of this increase was among large group plans, with individual and small group plans growing only slightly or keeping steady with population growth. This membership increase was primarily in three plan types, specifically, HMO with POS, PPO, and HDHP plans. This was a positive sign for the industry, particularly given the rising cost of health care. This was the largest single year increase in members since 1999.

However, Utah comprehensive health insurers also reported a significant increase during 2007. Insurers reported an increase of over 33,000 members, an increase of 3.9 percent. Nearly 75 percent of the increase occurred among large group plans, with the remainder occurring among small group plans. Individual plans reported a slight decrease. As for plan types, increases were reported among every plan type except HMO, which experienced a significant decline. This was due in part to a one-time restructuring of the market place. This restructuring has two components. First, nearly half of the increase was due to two new foreign insurers entering Utah's comprehensive health insurance market and acquiring new members, with most of the remaining increase occurring among the top three domestic insurers. Second, one of Utah's large domestic insurers, in response to market demands for products with more open provider networks, shifted a large block of business from HMO plans (which have a more limited provider network) to HMO with POS plans (which provide the option to use non-network providers but at a higher cost). These are positive changes Utah's health insurance market and suggest that Utah's commercial health insurance market is attractive to new insurers and that Utah's insurers are responsive to market forces and will change how they do business if the demand is there.

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