Health Insurer Financial Insights Volume 7
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We present the December 2021 edition of our Health Insurer Financial Insights newsletter as we continue to operate in unprecedented times. This newsletter focuses on public and non-public claims experience for health insurers through Q3 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.

Q3 2021 Statutory Financials – Individual, Group, Medicare, and Medicaid Markets

Overall, health insurers reported profit margins decreased slightly in Q1–Q3 2021 to 2.9% with increased loss ratios in the Individual and Group markets as claims experience remains above normal levels compared to 2020 and pre-COVID period 2017 to 2019.

Q3 2021 Reported Claims Experience

The annual incurred claims trend reported in Q3 2021 ranged from -4.7% in Medicaid Managed Care to 10.0% in the Individual market. Overall, the change in quarterly reported incurred claims PMPM from Q2 2021 to Q3 2021 was higher in the Commercial Individual market relative to the reported claims increases seen from Q2 to Q3 during the pre-COVID period of 2017–2019, while the changes seen for other lines were similar to those reported in the pre-COVID period which is some indication that quarterly seasonal claims patterns are beginning to normalize.

Legislative Update

Since March 2020, Congress has passed and the Trump and Biden administrations have enacted several pieces of legislation with the goal of providing federal support to soften the economic and social impacts caused by the on-going COVID-19 pandemic. We have summarized some major healthcare provider and payer provisions of these acts, along with the estimated impact on federal budget per Congressional Budget Office (CBO) analyses.

Q3 2021 Public Companies Financial Performance

Public Companies’ reported margins continued to decrease during Q3 2021 as loss ratios increased from reduced levels seen in Q2 2020 due to COVID-19 impact. Companies saw increases in operating expense ratios in Q3 2021 but the levels are still below 2019 and 2020.

COVID-19 Impact Per Health Carriers Q3 2021 Earnings Releases

Carriers continue to see substantial increases in their Medicaid membership driven by the pause in reverification or redetermination of Medicaid eligibility. The Commercial membership has stabilized and increased slightly in both Q2 and Q3 2021 for the public carriers analyzed. The chart below displays the changes in reported enrollment for the six most recent quarters for Commercial and Medicaid.

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