Recession Brings Changes To Every Industry, Including Health Insurance

As the economy worsens and becomes very uncertain, the stability of health insurance coverage becomes uncertain as well. The number of Americans looking for suitable work is on a steady increase and this changes the health insurance coverage. In the past we have history examples of how a recession and large unemployment did change health care coverage for many people. Many households will attest that health care cost is one of the largest household expenses. Hundreds of dollars are spend each month on doctor visits and prescription medications after insured coverage help. In recession times the trend is prescriptions go unfilled each month and the doctor is visited less and less, except in the event of a real emergency. When the times get desperate and desperation looms heavy because of reduced or eliminated incomes, medical expenses are usually the last expenses generated.

Employer sponsored health insurance, seen once as a benefit, are more of an essential part of employment. People take advantage of employer sponsored health insurance, if the pay level can allow them to. The current recession has seen large decreases in the employee's paycheck. Often these cuts are too steep for them to afford even the employer sponsored programs. This has led to a rise in people opting out of employer sponsored plans.

Adults that were once covered by employer sponsored plans are now steadily in decline which is a stark contrast to the increase of children of children qualifying and receiving state sponsored agency coverage. When the family income is reduced, most children qualify for the state assisted heath insurance. Recession is also a time when people make sure their children are covered. This burden is shifted to the state and does stretch any funds that are available. If the funds are depleted, many patients risk being dropped by their doctors if the state funded program can no longer pay the bill.

State agencies are not the only entities facing drastic challenges during recession, so do the private health insurance companies. When the number of premium paying people begins to decrease, most insurance companies are forced to raise their rates which increased the reduction of policy holders; however they do experience a spike in lower cost catastrophic policies. This will cover many life threatening illnesses and situations but does not offer prescription medication costs or regular doctor visits. Private insurance companies are constantly under assault from governmental requirements concerning what types of coverage they must offer and if this happens during an economic downturn, the plans often bloat and become a liability. These factors will affect the private health care insurance industry and force policy holders to switch to a more affordable state sponsored plan. Being competitive with superior service and many good option plans that will accommodate most any budget is the only hope many of these companies have of staying in business.

This current economic recession climate is poised to have long lasting and dramatic effects on the insurance industry as a whole. Changes are being forced by lower paycheck amounts, coupled by the increasing federal and state mandates that every insurance company must comply with. Changes will happen in all areas of the insurance industry; employer, private and state sponsored plans, if they are to survive the current swells and challenges of this recession.