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Membership rolls in free fall

Reflecting the continuing foundering economy, membership rolls at nine major managed care companies continue to decline. In particular, WellPoint reported membership declines in its commercial risk business, according to the “2010 Managed Care Industry Report” from the KPMG Healthcare & Pharmaceutical Institute. The other eight companies are Aetna, Amerigroup, Coventry, Health Net, Health Spring, Humana, Kaiser, and United.

The report points out that 50 percent of the members at Aetna, United, and WellPoint are in nonrisk plans in which employers are directly responsible for health care costs. As health care costs continue to increase, large employers will continue the shift to nonrisk plans to better control future costs, says James Davenport, audit partner and health care practice leader for KPMG’s Minneapolis market.

Membership growth is expected to be slow for the industry in 2010, but acquisitions could increase growth rates for some companies. As enrollment is tied to employment levels, membership levels may increase if the employment situation improves.

“When 2014 arrives and the exchanges come online, we’ll probably see another change in the membership mix — to the tune of 34 million people. Companies are going to have to ask now, ‘Here’s what membership looks like today, but we know there’s a lot of change coming. Where do we want to be in the market when 2014 arrives?’” says Davenport.

Change in membership (millions)

Source: KPMG Healthcare & Pharmaceutical Institute, 2010 Managed Care Industry Report

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