MCsceptic

Why B/E Is More Important than P/E to Health Insurers

There will be continued pressure on this Benefit Expense ratio in coming months as comapnies with BETTER than average health will be the FIRST to drop coverage in this tough economy, and the last to take an increase in price. There is little that Managed Care companies can do today to actually "manage down" the cost of care, with much more savvy players delivering care than in the early days of Managed Care. This ratio is also under pressure from some states that think there should be minimum ratios mandated, especially in the Individual and Small group market, where these ratios are the lowest. Actions such as outlawing Recision activity in California and other states will pressure up dramatically the BE in the Individual market. Therefore this ratio will continue to erode for many if not all these companies, and their profit margins and revenues will continue to be stressed.