A Price War In Health Insurance
When UnitedHealthcare (UNH) told American Printing House for the Blind that its health insurance bill would jump 49.9% in 2008, Chief Financial Officer William G. Beavin decided to shop around. He settled on Humana (HUM), which offered a less generous plan that delivered a 17% rise. That's steep, and will cost the Louisville-based publisher, which has 310 employees, about $1 million a year, but it's manageable. "It's nice to know you've got health-care organizations that are willing to work with you," says Beavin. "It's not a take-it-or-leave-it situation."
Health insurance has always been pricey for small and midsize businesses. But after years of extracting hefty increases from smaller corporate customers, some insurers are showing more flexibility. Why? With the overall market for health insurance flat, carriers are battling to steal market share from one another. "There's a price war going on now," says Blaine Bos, a partner at consulting firm Mercer (MMC).