Financial Results

Key Financial Data for Leading Health Plans — Second Quarter 2022

Here’s how major U.S. health insurers performed financially in the second quarter of 2022. Health Plan Weekly subscribers can access more health plan financial data — including year-over-year comparisons of leading health plans’ net income, premium revenue, medical loss ratios and net margins. Just email support@aishealth.com to request spreadsheets for current and past quarters.

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MCO Stock Performance, August 2022

Here’s how major health insurers’ stock performed in August 2022. UnitedHealth Group had the highest closing stock price among major commercial insurers as of August 31, 2022, at $519.33. Humana Inc. had the highest closing stock price among major Medicare insurers at $481.78.

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Amid Inflation, Possible Recession, Insurers Are on Strong Financial Footing

Despite worrying macroeconomic trends, health insurers have done well this year so far, with all the largest publicly traded health insurance firms posting year-over-year earnings growth in the first half of 2022. Experts tell AIS Health, a division of MMIT, that they don’t expect health insurers to struggle despite ominous signs across the economy.

Those headwinds include inflation; a possible recession, which could decimate employer-based insurance enrollment; medical cost growth; and the resumption of Medicaid eligibility redeterminations, which will force unprecedented amounts of disenrollment. But experts say that insurers with a mix of business lines should be in a strong financial position. The largest risk is likely to insurers that carry a coverage mix disproportionately focused on the commercial market.

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Startup Health Insurers Oscar, Clover Signal Course Changes After 2Q

The four publicly traded startup health insurers — Oscar Health, Inc., Bright Health Group, Inc., Clover Health Investments Corp. and Alignment Healthcare, Inc. — continued to post losses in the second quarter of 2022, but two out of the four lost less money than they did in the prior-year period. Beyond their finances, however, some of the companies are making changes to their business strategies in a bid to set a stronger course for the future.

Medicare Advantage-focused Clover Health, for instance, revealed that CEO Vivek Garipalli will be replaced by Andrew Toy, the company’s current president, starting on Jan. 1, 2023. In an Aug. 8 news release, Clover said the move “is the culmination of a succession plan we’ve had in place since Andrew joined Clover as CTO and led the development of Clover Assistant,” referring to the company’s proprietary clinical decision-making tool.

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Teasing 2023 Expansions, Regional MA Insurers Eye Competitive Texas Market

As Medicare Advantage insurers gear up to compete for enrollment during the 2023 Annual Election Period (AEP) that begins on Oct. 15, a handful of companies have already unveiled service area expansions that are pending CMS approval. Several of them named new territories in Texas, where some 4 million Medicare beneficiaries reside.

According to AIS's Directory of Health Plans (DHP), more than half of Medicare beneficiaries in Texas are enrolled in an MA plan. UnitedHealthcare has the biggest market share in the state, with 48.9% of enrollees, followed by Humana Inc., with 16.8%. And UnitedHealthcare has reportedly purchased the seventh-largest Texas MA plan, KelseyCare Advantage, which is operated by KS Plan Administrators and affiliated with medical group Kelsey-Seybold.

In 2Q, Some PBMs Report Dampened Margins, Customer Pipelines

Unlike in recent periods, PBMs were not necessarily stars of the show as the country’s largest publicly traded managed care organizations reported their second-quarter 2022 earnings. However, executives across the board still touted PBMs as a key component of their growth and diversification strategies.

At UnitedHealth Group, the first major MCO to report its quarterly results, one equities analyst queried the health care giant’s leaders about why OptumRx’s “strong” revenue and membership growth haven’t translated into larger margins.

MCO Stock Performance, July 2022

Here’s how major health insurers’ stock performed in July 2022. UnitedHealth Group had the highest closing stock price among major commercial insurers as of July 29, 2022, at $542.34. Humana Inc. had the highest closing stock price among major Medicare insurers at $482.00.

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Insurance, Retail Segments Help CVS Beat Expectations in Second Quarter

Although many people still associate CVS Health Corp. with its ubiquitous retail pharmacy locations, executives during the company’s second-quarter 2022 earnings call highlighted the Health Care Benefits segment — which houses legacy health insurer Aetna — as one of the firm’s strongest business assets. Meanwhile, the Rhode Island-based company said it’s planning to acquire more care-delivery assets by the end of the year.

During an Aug. 3 conference call to discuss quarterly financial results, CEO Karen Lynch touted the Health Care Benefits segment’s “strong quarter,” noting that the business line saw revenue growth of nearly 11% compared to the prior-year period. The firm’s medical loss ratio (MLR) of 82.9% also improved by 120 basis points year over year, “reflecting medical cost trends that remain modestly favorable to our pricing assumptions,” according to Chief Financial Officer Shawn Guertin.

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Cost-Control Efforts Pay Off for Cigna in Second Quarter

Cigna Corp.’s ability to rein in medical costs during the second quarter of 2022 impressed equities analysts and led the health insurer on Aug. 4 to surpass the Wall Street consensus earnings per share (EPS) estimate while raising its full-year EPS outlook.

Cigna posted “the largest MLR beat among MCOs this quarter,” with its medical loss ratio of 80.7% coming in 220 basis points below the consensus estimate, Evercore ISI analyst Michael Newshel pointed out in a note to investors. That comes after a 110 basis-point beat in the first quarter of 2022, he added.

And SVB Securities analyst Whit Mayo observed that “medical costs were well-controlled during the quarter,” with Cigna’s MLR “driving the bulk of the [company’s] outperformance.”

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Molina Posts Solid 2Q Results Despite High MLR

Molina Healthcare, Inc. posted solid results in the second quarter of 2022, earning favorable reviews from Wall Street despite posting a high medical loss ratio (MLR). Executives from the Medicaid- and marketplace-focused carrier touted a recent streak of acquisitions — and teased more transactions and new contract awards.

Total revenues for the second quarter of 2022 amounted to $8.05 billion, up from $6.8 billion in the second quarter of 2021. Profits also increased, with Molina posting $266 million in net income for the quarter with an after-tax margin of 3.3%, up from $199 million and a 2.9% margin in the second quarter of 2021. According to Barclays analyst Steve Valiquette, those results beat Wall Street’s projected margin of 1.2%. Earnings per share (EPS) were $4.55, up from $3.40 in the second quarter of 2021.

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