subject: Recession Brings Changes To Every Industry, Including Health Insurance [print this page] As the economy worsens and becomes very uncertain, the stability of health insurance coverage becomes uncertain as well. The number of Americans looking for suitable work is on a steady increase and this changes the health insurance coverage. In the past we have history examples of how a recession and large unemployment did change health care coverage for many people. Many households will attest that health care cost is one of the largest household expenses. Hundreds of dollars are spend each month on doctor visits and prescription medications after insured coverage help. In recession times the trend is prescriptions go unfilled each month and the doctor is visited less and less, except in the event of a real emergency. When the times get desperate and desperation looms heavy because of reduced or eliminated incomes, medical expenses are usually the last expenses generated.
Once viewed as part of the employee benefit package, the employer sponsored health insurance was part of the essential employment landscape. Employees generally took advantage of this perk if the profits allowed it. The recession is good at killing much of the employee paycheck each week. These steep pay cuts no longer allow them to afford any employer health care programs. Because of this shift in paycheck income, opting out seems to be the only option left for the employee.
The decrease of adults, covered by employer sponsored plans is a stark contrast to the increase of children's coverage by state agencies. With the reduced income in the home, more children qualify for state assisted health insurance. In a recession, people still look to make sure that their children are covered. This puts a larger burden on the state and may stretch the funds that are available. Once this happens, some doctors may stop taking patients that are on these state programs.
During times of recession, drastically challenges face the private health insurance provider sector. This is usually responsible for the decreased participation that in turn forces many of these companies to raise their rates, which in turn reduces the number of participants. A bright trend in the turmoil is that the lower cost catastrophic coverage policies see a steady increase. These policies cover any life threatening illnesses or emergencies but don't include routine doctor visits or prescription medication coverage. The add to the dilemma, these insurance companies have to comply to state and federal regulations that will usually dictate what type of coverage must be offered and this intrusion is on the increase. This forces the plans to become bloated and not very sustainable in recessive times. As the state sponsored plans becomes the most affordable health coverage options, this places more pressure on private health care coverage as people ditch the private for the state sponsored plans. These companies have to find new ways to stay competitive such as focusing on service and offering plans that are affordable on most any budget.
The insurance companies will have to deal with some long lasting and dramatic changes to their industry because of the current recession. These changes will be driven more by the lower paycheck of the average American worker along with the state and federal mandates that are on the increase and must be complied with. Plans that will experience change include employer, private and state sponsored, if they are to survive and thrive during and after this recession.
by: Ethan Kalvin
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