Here’s how major health insurers’ stock performed in March 2022. UnitedHealth Group had the highest closing stock price among major commercial insurers as of March 31, 2022, at $509.97. Molina Healthcare, Inc. had the highest closing stock price among major Medicaid insurers at $333.59.

For the country’s major health insurers, an increasing amount of revenue and growth comes from business lines that serve government programs. Industry experts tell AIS Health that they don’t envision this changing anytime soon, but they do see ongoing business risks that will keep insurers on their toes.

“The aging of the U.S. population has had a positive impact on the senior products segment and has led to consistent growth in the segment’s revenues and earnings for health insurers, a trend that is expected to continue in 2022 and beyond,” noted a recent report from the insurance-focused credit rating firm A.M. Best. Medicare Advantage premiums reached $292.9 billion in 2020 — about 13.8% higher than 2019 and more than double that of 2012.

New York City is appealing a recent ruling by the New York Supreme Court that bars the city from imposing a premium on public sector retirees who opt out of group Medicare Advantage coverage that starts April 1. Anthem, Inc. was initially contracted to provide MA coverage to an estimated 200,000 retirees and dependents for a Jan. 1 effective date. Manhattan Supreme Court Justice Lyle Frank on March 3 ruled that automatic enrollment of beneficiaries cannot start until April 1, retirees must be able to opt out of the new coverage up to three months after the effective date, and they do not have to pay a fee to retain their traditional Medicare coverage. The city’s attempt to charge $191 monthly is in violation of New York City law, which requires the municipal employer to “pay the entire cost of health insurance coverage for city employees, city retirees and their dependents,” Frank ruled. The city’s Office of Labor Relations on March 4 filed an appeal; the NYC Organization of Public Service Retirees at press time had filed a cross-appeal and was gathering signatures for a petition urging Mayor Eric Adams (D) not to pursue the appeal.

As has been the case in previous quarters, all four of the newly public health insurance startups — Oscar Health, Inc., Bright Health Group, Inc., Clover Health Investments Corp. and Alignment Healthcare, Inc. — reported losses for the final three months of 2021. However, a look at both the fourth quarter and full year reveals that there were considerable differences among those companies in terms of the severity of their losses and the trajectory of their businesses.

“The four public startup health insurers lost $2.5 billion in 2021,” observes Ari Gottlieb, a principal at the consulting firm A2 Strategy Group, who calls that a “staggering amount of money.” Bright Health — which has Medicare Advantage, Affordable Care Act exchange and health care provider assets — was responsible for roughly half of that total loss among the quartet of insurers, losing just under $1.2 billion for the full year.

Here’s how major health insurers’ stock performed in February 2022. UnitedHealth Group had the highest closing stock price among major commercial insurers as of Feb. 28, 2022, at $475.87. Molina Healthcare, Inc. had the highest closing stock price among major Medicaid insurers at $306.87.

With UnitedHealth Group poised to battle the U.S. Dept. of Justice in court over the fate of its proposed purchase of Change Healthcare, Inc., there’s still a host of unknowns about how that legal case will play out. However, one thing does appear to be clear to industry observers: UnitedHealth will be just fine no matter how the fight to salvage its transaction plays out.

In the credit rating world, “if the deal is ultimately stopped by the DOJ, it would be credit positive for UnitedHealth” because it would require the company to take on less debt, “but long-term growth prospects would be incrementally diminished,” Moody’s Investors Service wrote in a Feb. 28 report.

Some Medicare Advantage insurers could take a hit if HHS decides to cancel an increasingly controversial care delivery model that allows participants to share risk and receive capitated payments for serving fee-for-service (FFS) Medicare beneficiaries.

The Global and Professional Direct Contracting (GPDC) model fully launched in April 2021, with 53 Direct Contracting Entities (DCEs) participating. Although most DCEs were provider-led organizations such as Iora Health, some MA insurers also threw their hats into the ring, including startup Clover Health; Humana Inc., under the CenterWell brand name; and Anthem, Inc., under the CareMore brand name.

Despite better-than-expected financial results posted for its fiscal-year 2022 second quarter, shares of InnovAge — the largest provider of Programs of All-Inclusive Care for the Elderly (PACE) — tumbled last week amid concerns about its ability to grow in the face of intensifying regulatory scrutiny. Between federal audits and issues with its state partners, InnovAge’s many struggles relate to program compliance and may demonstrate the difficulties of scaling up a specialized care model in a highly regulated industry.

Providing services primarily through a dedicated center, PACE organizations support frail, elderly Americans who require a nursing-home level of care by offering comprehensive medical care and social supports to help them remain at home. The PACE market serves about 51,000 participants, most of whom are dually eligible for Medicare and Medicaid, and it is largely composed of regional organizations. As the dominant PACE organization, InnovAge serves 12% of that market.

Centene Corp.’s shares rose following its fourth-quarter and full-year 2021 earnings release on Feb. 8, with the market seemingly impressed with the insurer’s Medicaid and Medicare Advantage membership gains. Still, one equities analyst sounded a note of skepticism about what large MA enrollment gains will mean for Centene’s margins.

“Outsized share gains in MA are typically a cautionary sign for margin,” Jefferies analyst David Windley wrote in a Feb. 8 note to investors. Centene’s management “is signaling flat ’22 MA margin, but is flat still optimistic with multiple competitors calling out CNC’s aggressive pricing?”

For the fourth quarter and full-year 2021, CVS Health Corp. reported a strong financial performance across its vertically integrated health care business, but its health insurance division Aetna had mixed results. While Aetna delivered higher-than-expected enrollment in Medicare Advantage, it didn’t meet expectations for enrollment on the Affordable Care Act exchanges — a book of business the firm re-entered after several years away from the individual marketplaces.

Aetna took in $20.6 billion in revenue in the third quarter of 2021, according to a CVS press release, up from $19.1 billion in the same period of 2020. It recorded a medical loss ratio of 87%, up from 86.7% in the same period last year; for the full year, Aetna reported an MLR of 85%, up from 80.9% in 2020.