As Americans Lose Jobs, Insurers Lose Members

As unemployment rises around the country many people are losing access to health coverage. And while the federal government has tried to make it easier for those who have lost their jobs to extend their coverage, insurance providers are seeing big drops in subscribers.

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JACKI LYDEN, host:

We'll spend the next part of the show looking into something that's putting major stress on the American health care system. It's not an illness; it's unemployment.

In a few minutes, I'll visit one small town clinic trying to handle waves of the newly unemployed.

First, though, we'll start big picture, with a look at how insurance companies are being slammed in some ways you might not suspect.

NPR's Larry Abramson has the story.

LARRY ABRAMSON: WellPoint is the country's largest health insurer, with nearly 35 million subscribers. This week, WellPoint announced it lost close to half a million members in the first quarter of this year alone. WellPoint's Wayne DeVeydt says his company expected a decline but nothing as big and broad as this.

Mr. WAYNE DeVEYDT (Chief Financial Officer, WellPoint Inc.): It's not like we're seeing a lot of young employers getting laid off. It's not like we're seeing a lot of older employees getting laid off. What we're seeing is it's pretty evenly distributed.

ABRAMSON: DeVeydt says the single biggest cause of the drop is unemployment. He says states with the highest unemployment rates are seeing the biggest jumps in dropped health care.

UnitedHealth Group, the number two health insurer, reported a drop of over 900,000 members since last December, mostly due to rising unemployment. And UnitedHealth says that number could climb to one and a half million by the end of the year if unemployment keeps climbing.

These numbers fit in with other surveys by organizations like the Kaiser Family Foundation.

Kaiser's Mollyann Brodie says even people who are still insured are cutting back on health care.

Dr. MOLLYANN BRODIE (Vice President and Director, Public Opinion and Media Research, Henry J. Kaiser Family Foundation): If you look across all of these measures, about six in 10 are telling us that they're putting off some kind of care because of the cost right now.

ABRAMSON: Some hospitals are reporting a drop in elective procedures.

Paul Ginsburg, president of the Center for Studying Health System Change in Washington, D.C., says that for many people, health care has become something else to scrimp on.

Dr. PAUL GINSBURG (President, Center for Studying Health System Change): The same reason they're hesitating about buying cars, they're probably putting off elective procedures.

ABRAMSON: The federal government has been preparing for the likelihood that high unemployment rates would add to the number of uninsured. That's why the stimulus plan, passed in February, provides a safety net. The stimulus gives the unemployed a 65-percent reduction in the cost of extending their health insurance premiums through the law known as COBRA.

Paul Ginsburg says that will help somewhat.

Dr. GINSBURG: Yeah. I mean, I think the subsidy's going to make a big difference, but, you know, it won't be enough for everybody because we're talking about people that have lost their income.

ABRAMSON: Health insurer WellPoint says it's too soon to say how many people will take advantage of the subsidy to re-apply for coverage. The company says it's trying to figure out whether it can offer cheaper policies that will attract the newly uninsured.

Larry Abramson, NPR News.

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