Thursday, May 07, 2020

FOR PROFIT HEALTH CARE USA KA-CHING
America's biggest health insurers have been so profitable during the coronavirus that one is already giving cash back to customers, while hospitals lose billions

BIDEN WALL ST DEMOCRATS BACK BIG INSURERS AGAINST MEDICARE FOR ALL

Lydia Ramsey BUSINESS INSIDER MAY 7, 2020
Crystal Cox/Business Insider


While many healthcare companies have taken financial hits amid the coronavirus pandemic, health insurers have managed to stay afloat.

A review of the largest publicly-traded health insurers' first-quarter results for 2020 show that most have weathered the initial weeks of the pandemic financially, maintaining their financial guidance for the year.

The insurers have been boosted in large part by paying out fewer medical claims as hospitals have deferred surgeries and visits, a trend insurers expect to see continuing in the second-quarter of 2020.
 
Health insurers responsible for covering the cost of healthcare for Americans find themselves in a curious spot during the coronavirus pandemic.

Even as some hospitals are overwhelmed with coronavirus patients, the insurers are posting strong profits. The six largest publicly traded insurers made $8.6 billion in profit combined from their health plan businesses in the first three months of 2020.

Health insurers are saving a significant amount of money because many people aren't getting other types of costly care, such as surgeries and procedures. That means the insurers are doing well financially, despite taking measures to waive costs associated with testing and treatment for the novel coronavirus.


Hospitals, on the other hand, are struggling. Caring for coronavirus patients is far less lucrative than the surgeries that have been put on hold, and the facilities expect to lose close to $203 billion in revenue between March and June. Companies that make medical devices are seeing their business disrupted, too.

A survey conducted by Boston Consulting Group found that there's been a 60% decline in medical procedures across the US. By BCG's calculations, procedure volumes will continue to be 30% lower than they were before the pandemic over the following 12-18 months. 

Because so many Americans get insurance through work, many of those people now have to get insurance from the individual exchanges set up by the Affordable Care Act or through Medicaid. They can also pay the full price for their work-based coverage via an option called COBRA. Others might not be able to pay premiums on their existing health plans. 

While reporting their first-quarter earnings, the insurers shared a snapshot of how their businesses fared through the early days of the pandemic and what's ahead for the rest of the year:

Humana beat estimates in late April based on its growth in membership for its Medicare Advantage plans. It maintained its annual financial guidance. It made $1 billion in adjusted pre-tax income. 

Cigna, reported having a "strong" first quarter of the year, also maintaining its financial guidance. Its insurance business made $1.2 billion in adjusted income from operations. 

CVS Health, which owns the health insurer Aetna, grew its business in the first-quarter of 2020. It left its 2020 guidance unchanged. Its healthcare benefits segment made $1.1 billion in operating income. 

Anthem, the $69 billion health insurer that offers health plans under the Blue Cross and Blue Shield brand in 14 states, beat on revenue projections for the first quarter and upheld its projections for 2020. It made $1.8 billion in operating gain from its health plan business. 

UnitedHealth Group, which operates the biggest health insurer in the US, in April didn't change its 2020 guidance, maintaining a forecast for net earnings per share between $15.45 and $15.75. Its insurance arm made $2.9 billion in earnings from operations. 

Centene, the largest Medicaid insurer, raised its revenue guidance amid the pandemic, citing higher unemployment in the US. The insurer made $476 million in adjusted net earnings in the first quarter.

UnitedHealth on Thursday said it was providing $1.5 billion worth of support for customers by way of discounts to their premiums and waiving of copays for doctors' visits. Some of the moves were required by rules that require health insurers to refund customers when they make too much money, but UnitedHealth said "the vast majority" are not. Humana also said it's giving members free primary care, behavioral health and telehealth visits for the rest of the year.

CVS Health noted that it saw a 30% drop over the last two weeks of March and through April in discretionary or deferred care. In places around the country that have started to lift the shelter-in-place orders, visits to the doctor have started to tick back up, CEO Larry Merlo told Business Insider. But it won't be as straightforward as resuming visits — people have to feel comfortable stepping into a doctor's office or hospital.

"There's an element of consumer behavior that is in play here as it relates to discretionary care," Merlo said. "When will people be comfortable doing whatever it was, that they would have done had the pandemic never occurred. It's hard to gauge that trajectory. It's a real unknown at this point."

In the second-quarter, CVS expects to spend the least on medical care in 2020, with spending picking up again in the second half of the year.

"We do expect that to pick back up as we move forward through the balance of the year," Merlo said.




No comments:

Post a Comment