In the third quarter, insurers saw a slight dampening from the record-high profits recorded in the previous quarter as medical utilization rebounded to about 95% of normal volumes for most major payers.
They warned, however, that tailwinds may not last as people seek previously deferred care in the fourth quarter and into next year. Another widespread halting of elective procedures is unlikely as providers have learned more about safely carrying out routine care despite COVID-19 surges.
But novel coronavirus case rates and hospitalizations have reached record levels nationwide this week and it’s unclear how safe people will feel returning to hospitals and doctor’s offices for non-emergent treatments.
“It’s very reactive to the COVID infection rate, both in the number of hospitalizations we have directly related to COVID and how quickly elective and discretionary procedures begin to wane when the COVID infection rate is reported,” Molina CEO Joseph Zubretsky said during the payer’s third quarter call with investors.
Humana CFO Brian Kane on Wednesday said it’s also still unknown whether in-person utilization will ever fully rebound or may move to other locations like the home even after COVID-19 abates.
“Does utilization go back to baseline or has there been sort of a permanent shift? We certainly haven’t planned for that, but I think that’s a legitimate question,” Kane said during the Credit Suisse Healthcare Conference.
Another wild card is a potential coronavirus vaccine. Pfizer on Monday announced that the vaccine it has under development was strongly effective in preventing COVID-19. Previously, CMS has said private payers will be required to cover an approved COVID-19 vaccine and its administration with no cost-sharing. The payer lobby pushed back on that interim final rule, arguing it will increase costs.
That creates a lot of unknowns for commercial insurers, and they are currently modeling various scenarios.
Insurers also got a boost this week with oral arguments on the Affordable Care Act case before the U.S. Supreme Court. Worries the court may throw out the law entirely abated somewhat as conservative justices seemed open to severing the individual mandate from the rest of the act.
And the likeliest outcome of this year’s election — Joe Biden presiding over a divided Congress — is a positive for payers as it means more ambitious health policies like a public option or lower Medicare eligibility rate are unlikely to pass.
Here’s a roundup of commercial insurers’s third-quarter financial results.