Payers' Optimism Tempered By Economic Realities

During their second-quarter earnings calls in July and August, senior executives at major health plans were upbeat about opportunities in the healthcare benefits business: Medicaid and Medicare enrollments are expected to grow, while commercial accountable care organizations hold the promise of reducing the costs of care.

That optimism, however, is tempered by economic reality.

During the calls the executives conceded, that the job market remains weak, which impacts health plan membership growth. In addition there is increased competition for a share of a shrinking commercial market. Meanwhile, a promising Medicaid market is constrained by state budget woes and Medicare funding remains uncertain.

Their challenge is to work within this system.  During the earnings calls company officials outlined the steps they are taking to maintain revenue streams and deliver value to their providers and members.