“By all accounts, the publicly traded health insurers did very well last year,” said economist Sara R.
#SMASHING FOUR LEVEL COST FULL#
For the full year, Cigna earned $8.5 billion in profits, a 66% increase from the company’s profits of $5.1 billion for 2019. The day after Humana reported its financial results, Cigna reported $4.1 billion in profit for the fourth quarter of 2020, a big jump over the $977 million in 2019’s fourth quarter. For 2020, however, Humana reported a profit of $4.6 billion, a 40% increase over the company’s 2019 profits of $3.5 billion. The insurer attributed the loss to a big jump in hospital admissions for patients with COVID-19 in nearly all of its markets.Īlthough spending for non-COVID-19 care fell below normal levels by approximately 15%, Humana said that drop did not offset the rise in costs for testing and treating members with COVID-19.
3, Humana reported a loss of $458 million in 2020’s fourth quarter, a considerable drop from the $593 million in profit the company reported for the fourth quarter of 2019. The insurer said profits were substantially higher than normal due to the unprecedented delay in elective and nonemergency procedures, the Star Tribune in Minneapolis reported. 20, the nation’s largest insurer, UnitedHealth Group, reported its full-year 2020 profit of $15.4 billion, including $2.2 billion in profits for the fourth quarter, $3.2 billion in the third quarter and $6.6 billion in the second quarter. The financial ups and downs of a pandemic-afflicted year became apparent early in 2021 when three major health insurers reported on their financial performance for 2020’s fourth quarter and the full calendar year. Some of those sky-high profits were tempered in subsequent quarters when pent-up demand for care caused insurers’ costs to rise. Many for-profit insurers reported record profits in the second quarter and for the full year of 2020 because their members did not visit the hospital or see their physicians at usual levels. “The pandemic and resulting economic crisis have upended any expectations about what health spending, utilization and the subsequent financial performance of insurers might have looked like this year,” according to a report in December 2020 from Kaiser Family Foundation researchers. Although some costs rose due to increased spending for the care of insured members who contracted the SARS-CoV-2 virus, the shutdown of other healthcare services eased the financial pain for many insurers. Since then, actuaries have learned that any planning they did in 2019 likely had little value as COVID-19 infections spread nationwide, employers laid off workers, and governors shut down schools and businesses. This analogy was never truer than it was early last year, when actuaries read about the first reported cases of COVID-19 and feared a looming tsunami of the dreaded IBNR - incurred but not reported - claims. For health insurers, making actuarial calculations is like driving a car while using only the rearview mirror.
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