Slowing growth in health insurance costs may squeeze profit margins for smaller insurance companies focused on commercial coverage, according to a Bloomberg Businessweek report.
According to Wedbush analyst Sarah James, surveys of employers and insurers suggest that 2012 will see slower price increases than 2011. Healthcare use has grown at a slower pace this year, affecting pricing negotiations for next year's commercial business. She estimates that the cost of insurance will rise in the 7 percent range next year, compared to increases of approximately 8 percent this year.
These pricing trends may impact managed care companies by squeezing profit margins. Big insurers with more market share will be able to renegotiate contracts with providers to accommodate for slower price increases, but smaller insurance companies could suffer.
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According to Wedbush analyst Sarah James, surveys of employers and insurers suggest that 2012 will see slower price increases than 2011. Healthcare use has grown at a slower pace this year, affecting pricing negotiations for next year's commercial business. She estimates that the cost of insurance will rise in the 7 percent range next year, compared to increases of approximately 8 percent this year.
These pricing trends may impact managed care companies by squeezing profit margins. Big insurers with more market share will be able to renegotiate contracts with providers to accommodate for slower price increases, but smaller insurance companies could suffer.
Related Articles on Coding, Billing and Collections:
CMS: Physicians Cannot Bill Part B Contractors for Drugs Dispensed Directly to Patients
10 Ways to Get Paid More Per Surgery Center Procedure
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