Remember January 2020? Maybe not, but 2020 started with good prospects for a lot of industries. Unemployment was at all-time lows. The stock market and the US economy were chugging along. Then, as we all know, COVID-19 happened. The pandemic heralded unprecedented losses for many industries (including travel, entertainment, and on-site fitness). However, some lucky industries not only managed to survive the pandemic but to thrive amidst its raging fierceness.
Interestingly, the pandemic seemed to cast the die in favor of a select few, prominent among which was the often-maligned health insurance industry. In 2020 Health insurance companies were reported to have turned in profits well above their 2019 earnings. Notable among these companies is UnitedHealth Group. This massive health insurance company saw its earnings from operations grow to a staggering $22.4 billion in 2020 from $19.7 billion in 2019. HCA grew income in 2020 to $3.75 billion as compared to $3.5 billion in 2019. Anthem was also not left behind, as it raked in about $6 billion in operating gain in 2020, also up from 2019.
How did these health insurance companies do it?
The pandemic shut almost everything down, including elective care, routine care, and other health care activities involving health insurance, while people were shell-shocked and hospitals were overwhelmed by Covid-19. As these activities declined, it also follows that claims and admin costs incurred by health insurance companies were reduced. With fewer expenses, these companies raked in more profits over the period.
Now, the world, and even healthcare, is fast phasing back toward business as usual. Thus, claims and administrative expenses for health insurers will likely increase as healthcare activities resume. Also, health insurers are required to cover the total costs of COVID-19 testing.
2021 will begin to present new challenges for the health insurance industry, as Federal regulation CMS–1717–F2 takes effect. Hospitals are now required to publish pricing, by charge code, and also by payer (health insurance company) and plan. This promises to make things more challenging for health insurance companies as price transparency is finally coming to US healthcare costs.
Healthcare Data Analytics, Inc (www.hcpricing.com) is bringing transparency to US healthcare costs. Its platform provides comprehensive reported hospital pricing, allowing insurance companies, hospitals, corporations, researchers/universities, attorneys, financial services firms, government, and others to finally analyze and track hospital pricing, in an effort to gain control of US healthcare costs.