Despite growing revenues, most major insurers saw their profits from offering health plans shrink in the third quarter as pressures in government programs stretched into the back half of the year.
In Medicare Advantage, seniors are still utilizing more healthcare than insurers expected when pricing their plans. And in Medicaid, states’ payment rates continue to land well below the cost of caring for beneficiaries in the safety-net programs, payers say.
Those forces coalesced to hit insurers, slamming some — notably, CVS-owned Aetna and Humana — while swatting others. Aetna was particularly affected, posting the steepest year-over-year drop in operating profit by a wide margin.
Only two insurers — Cigna and Molina — reported a year-over-year increase in operating profit from insurance arms: Cigna, because most of its members are in commercially insured plans, which shelters the payer from headwinds in government plans;
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No doubt, third Q loss ratios may have impacted the scramble to save expenses by cutting commissions.
EGH has always been the key to bottom line profits caused by losses in government plans. Cost shifting from gov plans to commercial goes back at least 40 years, if not longer. Medicare and Medicaid are money losers.
In Medicare Advantage, seniors are still utilizing more healthcare than insurers expected when pricing their plans. And in Medicaid, states’ payment rates continue to land well below the cost of caring for beneficiaries in the safety-net programs, payers say.
Those forces coalesced to hit insurers, slamming some — notably, CVS-owned Aetna and Humana — while swatting others. Aetna was particularly affected, posting the steepest year-over-year drop in operating profit by a wide margin.
Only two insurers — Cigna and Molina — reported a year-over-year increase in operating profit from insurance arms: Cigna, because most of its members are in commercially insured plans, which shelters the payer from headwinds in government plans;
Offering health insurance is becoming less lucrative
In the third quarter, the seven major publicly traded insurers’ medical loss ratios increased an average of 3.3 percentage points year over year — a major jump in medical costs.
No doubt, third Q loss ratios may have impacted the scramble to save expenses by cutting commissions.
EGH has always been the key to bottom line profits caused by losses in government plans. Cost shifting from gov plans to commercial goes back at least 40 years, if not longer. Medicare and Medicaid are money losers.
