Other Recent Trends in Utah Health Insurance Membership Numbers

For example, recent surveys of the uninsured by the U.S. Census Bureau (Mills, 2002; Mills, 2003; DeNavas-Walt, Proctor, & Mills, 2004), the Utah Department of Health (Office of Public Health Assessment, 2004; Office of Public Health Assessment, 2002; Office of Public Health Assessment, 2001), and Utah's commercial health insurance industry (Utah Health Insurance Association/Utah Association of Health Underwriters, 2001) suggest that Utah's uninsured rate remained fairly constant between 1999 and 2003. Most of the surveys reported an uninsured rate of about 9 percent. Federal surveys reported a higher rate (between 13 and 14 percent), but report minimal changes in the uninsured during this period. Thus, changes in uninsured are unlikely to be a significant factor in the decline in membership from 1999 to 2003.

However, the most recent data from the Utah Health Status Survey suggests that Utah's uninsured rate increased from 9.1 percent to 10.6 percent from 2003 to 2007 (Office of Public Health Assessment, 2006a; Office of Public Health Assessment, 2006b; Office of Public Health Assessment, 2007; Office of Public Health Assessment, 2008). While the available data cannot confirm this, the change in the uninsured from 2003 to 2007 may be a contributing factor in the more recent changes in comprehensive membership.

The available data on Utah's government sponsored health benefit plans shows a moderate increase in membership, but this increase can only account for a small portion of the decline in the commercial market and could be connected to other factors such as changes in the economy and population increases. Most of the increases are in Medicare, Medicaid, and the Children's Health Insurance Program (CHIP).

In summary, changes in the individual and small group market do not seem to account for the significant declines in the large group market from 1999 to 2003. The available data are consistent with a shift by large employers from the commercial health insurance market to self-funded health benefit plans. This would be a reasonable response from large employers seeking to control the rate of health care costs. Self-funding can be attractive to large employers due to fewer state mandates and greater control over costs due to greater flexibility in health benefit plan design. However, recent increases in the uninsured and the number of residents covered by government sponsored health benefit plans may also be contributing factors.

Following the declines in membership from 1999 to 2003, comprehensive membership remained steady during 2003 and 2004, followed by an increase in membership from 2005 to 2007. Most of this increase was during 2006 and 2007 and occurred primarily among large group plans, with individual and small group plans growing only slightly or keeping steady with population growth.

Financial trends. To measure the current financial condition of the market, the financial results of the top seven comprehensive health insurers in Utah were used as an index of Utah's comprehensive health insurance market. These companies were selected because: 1) they represent 90 percent of the 2007 comprehensive health insurance market, 2) they receive more than 70 percent of their revenues from comprehensive health insurance, 3) nearly all of their revenues come from Utah business, and 4) their primary business model is that of a comprehensive health insurer. Thus, these companies are Utah's best examples of pure comprehensive health insurers and they can provide an index of how well comprehensive health insurers are doing in the Utah market over time.

Comprehensive health insurers, whether for-profit or non-profit, need enough income after expenses to fund state-mandated reserve requirements, to reinvest in new equipment and new markets, and to acquire and maintain needed capital. The results of this index indicate that Utah's comprehensive health insurance market has experienced an average gain of 1.59 percent in net income per year since 1995. However, this trend has improved since 1998, with an average of 2.58 percent in net income per year over the last nine years, although the market reported a slight loss of 0.13 percent for 2003. During 2007, the financials of these companies declined slightly, with an average net income per year of 4.34 percent. Net income for 2007 appears to be following a similar pattern in investment income, income from underwriting practices, and taxes paid during 2005 and 2006. According to the NAIC, the industry average for net income after expenses for Health Maintenance Organizations for 2007 was 3.7 percent, which suggests that Utah's comprehensive health insurers performed at or above the industry average for 2007. Overall, Utah's core comprehensive health insurers are financially solvent and have adequate reserves to cover health insurance claims. Utah's comprehensive health insurers are financially stable and are able to meet their financial obligations to consumers.

Coverage by Region:

Resources:

Articles:

'Utah Health Guide Pages:

Links: