Even as the COVID-19 pandemic ails global and national economies, the health insurance industry is reporting higher than expected first-quarter profits, Reuters reports.
The rise in profits is attributed to the decline of wellness and elective procedures delayed by safe-at-home orders, a financial saving for insurance companies that has outweighed the costs of testing and treating of more than a million Americans with the coronavirus.
UnitedHealth Group, the nation’s largest health insurance company, has already surpassed Wall Street profit projections, according to Reuters, and similar margins are expected from insurers Anthem, Humana and Cigna later this week.
Amidst hospitalization surges and shortages of medical supplies in areas hardest hit by the virus, medical centers are generally seeing and treating less patients.
For example, outpatient surgeries this month are down 70% from last April at HCA Healthcare Inc. facilities nationwide. In-patient admissions have fallen by nearly a third. HCA is America’s largest for-profit hospital network, and operates several northern Utah hospitals like Lakeview, Timpanogos Regional and Ogden Regional Medical Center.
But the rise in profits could be short-lived.
As the nation opens back up with increased COVID-19 testing and the relaxing of social distancing orders, Americans are expected to reschedule wellness appointments and elective procedures — which will cost insurers money.
Insurers also lose premiums when American’s lose their workplace-supported health insurance. Around 26 million people have lost their jobs, The Associated Press reported.
Newly unemployed Americans are enrolling in government-subsidized plans — under programs like the Affordable Care Act and Medicaid — which are less profitable to insurance companies, according to Reuters.
“There’s probably twice as much enrollment as we would have anticipated in the ACA,” said Pat Geraghty, chief executive of Florida Blue, a member of the Blue Cross Blue Shield health insurances company.