Lower ratings for health insurance companies

MedSave Admin | July 31, 2008

Fitch Ratings has revised its outlook on the U.S. Health & Managed Care Insurance Sector from "stable" to "negative." The announcement reflects Fitch's expectations of lower earnings for the U.S. domestic health insurance market sector for the remainder of 2008 and into 2009. Managed care companies are willing to cut prices, and their ability to forecast costs is not as strong as expected. This sets the stage for even more crazines in heath care ahead that could make today's health insurance situation look stable and calm.

We believe that traditional insurers are just beginning to feel the pinch of consumer driven health plans that allow employees to move from an expensive group health insurance plan to a low cost individual health insurance or "mini-med" plan. The recent growth of universal limited benefit health insurance plans like Core Health Insurance will certainly have an adverse effect on the operations of traditional health insurance plans.

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