Financial Results

MCO Stock Performance, October 2021

MCO stock performance in October 2021

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Big Three PBMs’ 3Q Results Make Up for Insurer Disappointments

The three largest PBMs — Cigna Corp.’s Express Scripts, UnitedHealth Group’s OptumRx, and CVS Health Corp.’s Caremark — each posted strong results in the third quarter of 2021. Indeed, those PBMs were essential — in the eyes of Wall Street — to making up for the impact of COVID-19 on the profitability of their parent companies’ health insurance subsidiaries.

Cigna Corp.’s Evernorth, the parent company of Express Scripts, took in $31.9 billion in pharmacy revenue for the first three quarters of 2021, up from $28.7 billion in the same period during 2020. Wall Street analysts were bullish on Evernorth and Express Scripts despite skepticism of Cigna’s overall performance.

Given COVID Surge, Humana Deviates From Peers With Lower Guidance

Like the other publicly traded insurers that reported third-quarter 2021 earnings late last month, select Medicare Advantage insurers in early November demonstrated strong performances during a quarter that was tainted by a rise in COVID-related costs. Unlike its more balanced peers, however, MA-focused Humana Inc. took a decidedly conservative approach to projecting earnings for the full year given continued COVID uncertainty.

Clover Health Struggles to Contain Medical Costs for MA Members

Of the newly public startup insurers that reported third-quarter 2021 earnings, all four posted higher (worse) medical loss ratios (MLRs) compared with the prior-year quarter — a direct result of higher COVID-related costs. The two insurers with a focus on Medicare Advantage, however, demonstrated wildly different experiences, with Clover Health Investments Corp.’s MLR clocking in at 102.5%, while Alignment Healthcare, Inc.’s 85.7% MLR was more in line with those of the larger, established insurers.