Morning Briefing
Summaries of health policy coverage from major news organizations
Health Law Boosts Earnings For Many Insurers
What a difference a year makes. The nation’s biggest health insurers entered last fall cautious about a major coverage expansion initiated by the health care overhaul, the federal law that aims to cover millions of uninsured people. ... But a year later, these challenges are starting to appear manageable, and investors see much less uncertainty ahead for the sector. Insurers have cut costs and raised prices to help mitigate added expenses from the law. They’ve also added new business. (10/29)
Cigna Corp. again raised its guidance as fee and premium revenue grew along with its customer base. The health insurer’s results easily topped analysts’ expectations. The company again raised its earnings outlook for the year, this time to a range of $7.25 to $7.45 a share, from $7.20 to $7.40. Fellow health insurers WellPoint and Aetna had also raised their guidance this week. (Calia, 10/30)
The Indianapolis insurer's big quarter comes after competitors Aetna Inc. and UnitedHealth Group Inc. also topped quarterly expectations and raised their annual forecasts. Insurers began the year cautious about a major coverage expansion initiated by the overhaul, the federal law that aims to cover millions of uninsured people. Late last year, the U.S. introduced state-based public health insurance exchanges that promised to give insurers millions of new customers by making it easier for people to buy coverage, sometimes with help from income-based tax credits. But the overhaul also heaped additional costs onto the balance sheets of insurers, including an industrywide tax that is non-deductible. It trimmed funding for Medicare Advantage plans and altered the manner in which insurers operate by preventing them from excluding high-risk patients. (10/29)
However, Magellan Health saw more than a 40 percent drop in net income during the third quarter that officials attributed to fees related to the health law -
Magellan Health experienced a more than 40% drop in net income during the third quarter that ended Sept. 30, attributable to a higher tax rate that resulted from the health insurance fee outlined in the Patient Protection and Affordable Care Act, the Avon, Conn.-based healthcare management company reported. Full-year expense related to the fee will be approximately $21 million, the company estimated. (Dickson, 10/29)
