Question

Trump Helps Health Insurers Swell Their Profits

Wall Street investment firms are under the impression that the Trump administration will waive the medical loss ratio requirement on insurers this year, which could allow the companies to pocket an unprecedented windfall of profits beyond what they made in that record-setting first quarter.

[readsludge.com]

{With such aggressive rate-cutting, one might think that UnitedHealth and its peers have sustained substantial losses to their extremely profitable businesses as well; indeed, according to estimates, coronavirus will cost insurance companies tens if not hundreds of billions of dollars in additional expenses. But so far, that’s not the case. In fact, on an earnings call last week, UnitedHealth Group, the country’s largest insurer, announced that profits from operations rose 3.4 percent to $5 billion in the first quarter, making this one of its most profitable quarters this decade, though down slightly from its all-time-high pre-coronavirus mark. Its revenues rose by nearly 7 percent to $64.4 billion. The company even found enough money lying around to continue buying back its own stock.}

William_Mary 8

Answer 1

You realize that first quarter profits are always high right?? CV19 costs were minimal in the first few months of the year, the flu season was not horrible this year, trauma season (the swell in catastrophic eventa that happens every spring) hadnt started yet, and most people are still in their deductible period (insurance comoanies arent paying for much outpatient care of any sort). The numbers/analysis will be much more meaningful and accurate after the second quarter.


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