We present the October 2021 edition of our Health Insurer Financial Insights newsletter as we continue to operate in unprecedented times. This newsletter focuses on market profitability and capitalization trends for public and non-public health insurers and their claims experience through Q2 2021. Our aim is to keep you abreast of key market trends and dynamics that impact health insurer financial results and profitability. We hope you enjoy the newsletter and find it informative.
YTD Q2 2021 Statutory Financials – Individual, Group, Medicare, and Medicaid Markets
Overall, health insurers reported profit margins decreased slightly in Q1–Q2 2021 to 3.8% with increasing loss ratios as utilization appeared to return to normal levels compared to the first half of 2020 when COVID-19 reduced utilization.
Q2 2021 Reported Claims Experience
The reported change in incurred claims PMPM from Q1 2021 to Q2 2021 ranged from -3.9% in Medicare Supplemental to 17.3% in the Individual market. Overall, the increase in reported PMPM claims from Q1 2021 to Q2 2021 was elevated in the Commercial Individual and Group markets relative to the reported claims increases seen in 2017–2019. The claims reported in the Medicaid, Medicare Supplemental, and Dental markets from Q1 2021 to Q2 2021 are in line with reported claims from Q1 to Q2 in the pre-COVID period 2017 to 2019.
M&A Activity of Health Plans in 2020 and 2021 (YTD Q3)
After quiet M&A activity in 2020 with $2 billion in deals being announced, the first three quarters of 2021 have seen a significant uptick in M&A of more than $23 billion. The deals in 2021 largely involve healthcare technology and clinical services acquisitions.
Q2 2021 Public Companies Financial Performance
Public Companies’ reported margins decreased during Q2 2021 versus Q1 2021, but returned to typical historical levels as loss ratios increased from the reduced levels seen in Q2 2020 due to the COVID-19 impact of reducing the utilization of medical services.
COVID-19 IMPACT Per Health Carriers Q2 2021 Earnings Releases
Carriers continue to see substantial increases in their Medicaid membership driven by the pause in reverification for Medicaid eligibility. The Commercial membership has stabilized and increased slightly in Q2 2021. The chart below displays the changes in reported enrollment for the six most recent quarters for Commercial and Medicaid Managed Care.
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