INDIANAPOLIS – The use of health care services tumbled in the third quarter, helping insurers report better-than-expected earnings and raise their 2010 profit forecasts.

But people haven’t stopped seeing the doctor; they’re just filing fewer claims than they did last year, when the unemployed were drawing on subsidized health insurance and the flu was more prominent than it’s been this year.

“In general, utilization is not in and of itself falling off the charts,” said Wayne DeVeydt, chief financial officer for WellPoint Inc., which operates Blue Cross Blue Shield plans in 14 states. “It’s more a function of what you saw last year being abnormally high and this year being normal.”

Several insurers also reported that claims left over from previous quarters came in lower than expected.

WellPoint said Wednesday it earned $739.1 million, or $1.84 per share, in the three months that ended Sept. 30. That’s a 1 percent rise from last year’s quarter, when the Indianapolis insurer absorbed a $20 million increase in flu-related expenses, mostly in the last two weeks of September.

DeVeydt said nearly all of that increase came from swine flu cases.

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WellPoint also saw claims fall in this year’s quarter as coverage ran out for some people who had lost their jobs but continued their employer-sponsored insurance under the federal law known as COBRA.

People who qualify for COBRA coverage can keep the insurance for 18 months when they lose a job, and federal subsidies encouraged more people than usual to do this. Without the 65 percent subsidy, the option can be too expensive for workers who just lost a steady paycheck.

COBRA coverage is a notorious claims generator for insurers. The people who use it normally do so because they have health conditions that make continued coverage a necessity. That means they generate more in claims than they contribute in premiums.

DeVeydt noted that unemployment really started to climb in the first quarter of 2009. That meant that starting with this year’s third quarter, a big population no longer qualified for COBRA coverage.

“If you’ve been unemployed for 18 months and your COBRA’s now expiring too, you’re probably not getting elective procedures done,” DeVeydt said. “You’re basically only doing what’s necessary.”

WellPoint competitor Aetna Inc. said Wednesday its third-quarter earnings jumped 53 percent to $497.6 million, or $1.19 per share, in part due to lower use of care.

Aetna Chief Financial Officer Joe Zubretsky said use fell compared with last year in several categories. That includes inpatient and ambulatory care and all types of medical practices. The company sees the economy as a possible factor, with people putting off discretionary or non-urgent care to save money.

“We are assuming that utilization comes back to some normal level in the future,” said Zubretsky, also an Aetna senior executive vice president.

 


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