Lack of use means profit for insurers

WASHINGTON, July 18 (UPI) -- Americans with health insurance are acting more like people who don't by skipping appointments or suffering chronic problems longer, a recent survey found.

The survey by Deloitte Center for Health Solutions conducted in June indicated a quarter of the respondents opted not to see a physician because of economic uncertainty and higher out-of-pocket costs, the Minneapolis Star Tribune reported Sunday. Roughly one in eight respondents said they reduced their healthcare spending significantly.

"We've been living in a dream world, assuming this is somehow different from managing other aspects of our lives," said Lee Beecher, a St. Louis Park, Minn., psychiatrist and president of the Minnesota Physician-Patient Alliance. "In economic hard times, people are pulling in their belts."

The trend has enhanced the profits of health insurers, a study of several companies found. Insurers set premiums this year on the expectation Americans who put off care during the worst of the recession would return to more normal patterns. But higher deductibles and other insurance provisos requiring people to sometimes pay thousands of dollars for procedures is holding back use of medical services.

In the first quarter of 2011, Blue Cross Blue Shield's system of non-profit insurers reported its highest profit margin since 2005, the Star Tribune reported. Citi Investments analyst Carl McDonald called the 4.8 percent margin an "unexpected windfall."

The better-than-expected profits come despite a provision of federal healthcare reform law requiring insurers to plow at least 80 cents of every premium dollar into patient care.

"New regulations are having an impact," David Heupel, a portfolio manager with Thrivent Financial, told the Star Tribune. "But they're being dwarfed by an overall lackluster use of healthcare."