Alabama BlueCross cuts jobs, citing economic downturn - Triangle Business Journal:

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The state’s largest health insurer has cut humanj resources positions in recent weeks and has told employees jobs will be slashec in itsclaims department. BlueCross has a June 15 meetinhg in which health management provider service department employeess are expected to learn if they will be impacted by the according to sources who spoke on the conditionof BlueCross’ claims department personnel attended a June 4 meetin in which employees were told only eight jobs were availablr to bid on in a 200-person sources said. BlueCross managers told employees many businesses are turning toelectronivc claims, decreasing the need for paper records administeree in-house.
Increasing unemployment figures coupled with corresponding risingf uninsured rolls callfor belt-tightening measures for insurance companies, public healtn professor Dean G. Smity said. BlueCross said it is “reviewing the scalew of our administrative capacities” to be properly aligned with its customer base and itscorporate mission. Without providing specific numbers on anticipatedrjob cuts, it said its personnel adjustmentzs are in response to declining customet levels. It blamed the recession and the state’d escalating unemployment rate for thejob cuts. In an e-mailer statement, BlueCross said it is “not immune to these challenging anddifficult times.
“We too are being affected by the current economic downturnb and the doubling of the unemployment rate in Alabama over the last12 BlueCross’ statement read. “Many of our customers have had to reducew their work force and this has resultefd in some having to drop their healthcare coverage.” Alabama’ds unemployment rate was 9 percent in April up from 4.5 percent in April 2008. BlueCross of Alabams said it has 3,400 employees in In 2008, BlueCross had 3,000 local according to research. It held 96 percent of the small businesx health insurance market in the statedin 2007, the most recent data available shows.
In BlueCross reported $4 billion in premium revenue, up from $3.5 billioh in 2007. Its $28.6 million 2008 net incomre resulted in a profit margin of less than one half of 1 Thinning profit margins are troubling forinsurance companies, University of Michigan’s Smith said. Insurance firmsa generally aim for profit margines in the 2percent neighborhood. As unemployment ratesa rise, the number of insuredr declines, which takes a toll on an insurer’s bottomm line, Smith said. He said cuts are in responser to theslumping economy. “Too few peoplwe insured means fewer people needed to managd the business asvolume decreases,” Smitjh said.
“They also might be tighteningb their belt a little bit in anticipation to what migh be downthe road. When you have less businesx you needfewer workers. That’s good management.”