Major payers saw their profits tumble in the fourth quarter of 2020 as expenses related to COVID-19 testing and treatment jumped, and some patients sought out care that had been put off.
But through the tumultuous year as a whole, insurers remained in the black as previous quarters produced what were in many cases record profits.
Executives were cautious for their 2021 outlooks but didn’t sound any dire warning bells. The return of deferred care remains to be seen as the U.S. embarks on a stop-and-go vaccine rollout, though CVS CEO Karen Lynch told investors “we’re not projecting high levels of pent-up demand” in her first earnings call as chief exec.
Still, there are signs payers are concerned about the uncertainty in the coming year, with the potential for sicker patients and high levels of demand for care. Anthem, for example, cut its 2021 earning growth outlook from 12% to 9%.
And Centene, which along with Humana reported a loss in Q4, announced a 6% workforce reduction.
One likely bright spot for insurers is the special enrollment period for Affordable Care Act exchange plans, which began Monday and runs to May 15. Payers with large government books of business like Centene and Molina should benefit the most.
Molina CEO Joe Zubretsky told investors last week the Biden administration’s early actions “just couldn’t be better for government-sponsored managed care, and we’re pleased to see that progress already being made.”
Companies that have been more focused on commercial plans are showing renewed interest in offering ACA plans. CVS’ Aetna will re-enter the exchanges in 2022 for the first time in four years, following expansions for this year from other major payers like Cigna and UnitedHealthcare.