H1N1 virus costing insurers millions

The largest health plans began seeing medical spending rise earlier this year and are expecting costs for the current flu season to be higher than usual.

By Emily Berry — Posted Oct. 16, 2009

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Health plans this summer already were spending tens of millions of dollars on claims they said stemmed from the influenza A(H1N1) virus, and executives at the largest health plans said they expect to spend more this winter for vaccines and treatment -- exactly how much, they aren't sure.

Among those planning for a significant bump in spending from H1N1 is WellPoint, the country's largest health insurer by membership, with about 35 million people enrolled in its plans.

"It is very difficult to predict whether you will have an above-normal flu season," WellPoint Chief Financial Officer Wayne DeVeydt said at a Morgan Stanley-hosted investor conference Sept. 14. "But we have seen enough this year with H1N1."

UnitedHealth Group, which has about 32 million members, spent $50 million on claims related to the virus in the second quarter of this year, mostly from doctors testing patients for the virus, not subsequent hospitalizations that would indicate cases where a member became seriously ill from H1N1, said G. Mike Mikan, the company's chief financial officer. As of September, Mikan said he still saw H1N1 as a "potential headwind" for the plan, financially speaking.

Health plan executives speaking this summer were clear that they couldn't predict the extent of the infections and associated costs this winter, but that the virus' early impact made them budget for a worse-than-usual flu season.

Humana President and Chief Executive Officer Mike McCallister, like some of his peers at other plans, said his company can't do much more by way of planning than to watch carefully as medical spending trends emerge this fall.

WellPoint's DeVeydt said that his company was not planning for "epidemic or pandemic levels."

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