[Ip-health] Insurers Catch Flu Bug:..... "flu claims cut into profit"

[Joana Ramos]

 From Portfolio.com
http://www.portfolio.com/views/blogs/heavy-doses/2009/10/27/insurers-hit-by-high-claims-for-swine-flu/


Oct 27 2009
Insurers Catch Flu Bug

It's not a bad time for insurance companies to come down with a case of
the swine flu.

The cost of treating and preventing the flu is adding to medical claims,
which means health insurers are reporting lower earnings this quarter
even as Washington lawmakers accuse them of having inflated profit.
Profitability has been a flashpoint in the debate over health reform.

Amerigroup Corp., which administers Medicaid and other government plans,
says it didn't meet it target for third-quarter profit because of high
flu-related costs in September. Last week, UnitedHealth Group Inc. said
flu claims cut into profit and may have an impact on fourth-quarter
income. Other insurers, including WellPoint Inc. and Aetna Inc., report
earnings this week.

While the flu trends are severe, they may "conveniently" have an impact
on profits for the second half of this year, Thomas Carroll, a Stifel
Nicolaus analyst in Baltimore, writes in a recent note to clients.

"Influenza impacts health plan profits on an annual basis, and given
reform activities, (health insurance) managements may overly emphasize
the potential impact," Carroll says.

The government is behind in its effort to distribute the vaccine and
more than 20,000 people have been hospitalized, according to Amerigroup.
The Virginia Beach, Virginia-based insurer is particularly hit hard
because its customers are among the most at risk, children and pregnant
women.

"It is difficult to determine if, and when, the situation will abate,
continue at current trends, or worsen," Amerigroup CEO James G. Carlson
says in a statement.

Brett Chase covers health care for Portfolio.com and writes the blog
Heavy Doses.


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Joana Ramos, MSW
Cancer Resources & Advocacy
Seattle WA USA
+1-206-229-2420
http://ramoslink.info/
www.bmtbasics.org