Medical Insurance Industry

Medicare has been one of the primary sticking points in the political process recently. When the federal government faced a shut-down, it did so in part because of debate between Congress and the president on the future of Medicare. However, the government is trying to encourage enrollment in managed care plans, which streamlines its active participation in the process and shares the financial responsibility with the private sector.

In addition, legislation is likely to limit future changes in Medicare hospital rates for patients who are outside the managed care plans, and more restrictions on reimbursements to these patients is also likely in the future (Markey, 1995, p. 662).

As the legislative battle over Medicare continues, several key trends are emerging. It is likely, for example, that physicians and hospitals may gain flexibility to offer their own managed care plans, a process which has already started i

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where health management organizations offer a variety of services, have made inroads into the bastion of market share. In addition, growth in Medicare has accelerated at most companies. Medicaid gains, while less substantial than gains in Medicare, have nonetheless been substantial at most health maintenance organizations. Incremental growth in Medicare has swelled revenue growth at several companies in the industry (Vignola, 1995, p. 52). Humana, Inc. Humana is one of the nation's largest managed health care service providers with more than two million members located in 14 states at the end of 1994. The following charts illustrate the company's revenues and net profit for the 1992 to 1995 (estimated) period (Lewis, 1995, p. 669); the company was formed when its parent separated into two publicly-held companies in 1993. Humana retained the managed care health plan business while the other company, Galen, operates acute-care hospitals (now part of the Columbia/HCA):
As evidenced by the chart, Humana has seen a strong increase in its revenues during the past several years, a situation which has come about through aggressive marketing to large companies and which is the basis for the company's continued growth. The compa
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Approximate Word count = 1773
Approximate Pages = 7 (250 words per page)

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