Fla. Small Group Health Market Grows 5%

HealthLeaders-InterStudy, a provider of managed care market intelligence, reports that the small-group health insurance market grew 5 percent in Florida through the second quarter of 2008. According to the latest Florida Health Plan Analysis, this growth trend likely will not be sustained as the economy slows and healthcare spending decreases.

"Small-group coverage is critical in Florida because small businesses represent about 90 percent of business in the state. While through the first half of the year, the Florida small-group insurance market remained resilient, this success is not likely to continue," said Roy Moore, analyst with HealthLeaders-InterStudy. "Florida's economy depends heavily on construction and tourism, which are obviously impacted by the economic downturn. In response, some employers are shifting more cost to the employee, while other companies are eliminating coverage altogether."

According to the report, one potential outcome of this spend reduction is the move to consumer-directed health plans, especially those with high deductibles, though such plans have not traditionally been popular in Florida.

The Miami-Fort Lauderdale-Pompano Beach and Tampa-St. Petersburg-Clearwater regions have been hardest hit in the state, losing more than 55,000 jobs combined in the past year. The resulting unemployment rate will likely impact UnitedHealth Group, which leads small-group enrollment in Florida, as well as Aetna and Blue Cross and Blue Shield of Florida, which also have significant small-group enrollment.

"UnitedHealth Group announced this week that it anticipates enrollment in its commercial health plans for employers to drop by as many as 1.5 million members in 2009," said Moore. "The reductions seen in Florida will likely be replicated in markets across the country."

Florida providers have indicated they are seeing more uninsured patients, and more patients who are under-insured and cannot pay their copays. Similarly, brokers and insurers are seeing employers tighten their healthcare spending. With the increase in charity care, providers are looking for relief from insurers, which has resulted in insurers passing on higher costs to existing clients.