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November 16, 2021 at 03:25 PM
What You Need to Know
- David Cordani of Cigna is seeing significant pockets of competitiveness in certain markets.
- Bruce Broussard says Humana took a more conservative approach to 2022 bids.
- One major shadow is the uncertainty surrounding the COVID-19 pandemic.
Some carriers might be fighting harder this year for some types of health insurance business.
That’s one message that came out of the recent round of quarterly insurance company earnings releases and quarterly insurance company conference calls with securities analysts.
Individual Health
David Cordani, Cigna’s CEO, told analysts that parts of both the employer health market and the individual and family plan (IFP) market are hot right now.
“Indisputably, there are some pockets of intense competitive pricing in the IFP marketplace,” Cordani said. In the individual market, he said, one priority is “maintaining price discipline in temporarily dislocated markets.”
Cigna believes it can add more employer health business in 2022 while improving its ratio of claim costs to premium revenue, Cordani said.
In the individual market, he said, Cigna will probably lose some enrollees but end up with better medical cost ratios (MCRs).
“We will be quite disciplined,” Cordani said. “We’re willing to make targeted trade-offs for MCR or margin versus volume.”
In the long run, however, Cigna continues to see the individual health market as a growth market.
Medicare Plans
Humana is one of the biggest players in the Medicare Advantage plan market.
Bruce Broussard, Humana’s CEO, said Humana has been seeing “more and more intensity in the local markets.”
“Similar to in the past, we see some players being more aggressive to try to gain market share, while others a little more aligned with pricing that promotes a little more stability,” he said. “So, we do see a bell curve in how people are approaching it.”
Meanwhile, all of the marketing efforts are creating more consumer awareness of Medicare plans, he said.
“I feel that we have been a beneficiary of that,” Broussard added.
The Earnings:
CVS Health
The Woonsocket, Rhode Island-based pharmacy chain and health insurer is reporting $1.6 billion net income for the third quarter on $74 billion in revenue, compared with $1.2 billion in net income on $67 billion in revenue for the year-earlier quarter.
The health care benefits business, which includes Aetna, is reporting $1.1 billion in adjusted operating income on $20 billion in revenue, compared with $1.1 billion in adjusted operating income on $19 billion in revenue.
Shawn Guertin, the chief financial officer, reported that commercial COVID-19 inpatient admissions were three times higher in August and September than in January, the previous peak month in the pandemic, and that COVID-19 testing costs approached January levels.
