Major Carrier Gearing Up for Change – Others to Follow

A major health insurance carrier operating in Texas has made a corporate decision to expand their self-funded business and is preparing to exit the fully-insured market within the next 18 months. Final decison to exit the fully-insured market will be made once final regulations are issued on the 80-85% minimum loss ratio requirement due to take effect on all renewals after January 1, 2011.

In our opinion, we will see unprecedented growth in self-funded plans due to Health Care Reform. Carriers and third party administrators will compete for record keeping positions with employer groups.

Stop loss carriers will reap a bonanza in new sales opportunities. More will enter the market than leave. Rate competition will create a soft market initially.

In a future posting, we will provide our definitive predictions of the direction of health care delivery in the near term, as well as outline new and lucrative business opportunities available to those with the ability to think out of the box with tempered risk tolerance to be assumed as a key element of success.

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