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Despite the pandemic, insurers seem cautiously optimistic about 2020. Here's why.

The nation's largest commercial health insurers do not appear to be bothered by the new coronavirus threat to their business, despite the fact that more than a million Americans have tested positive for COVID-19 and millions have lost their jobs, exposing them to the disease. employer-based coverage.

Senior insurance executives were wildly optimistic about the outlook for this year when they released the results for the first few quarters of their lives, which captured the initial impact of the pandemic. They were largely unscathed.

All of the nation's top private insurers have reaffirmed their full-year earnings projections, and Cigna has gone so far as to say that it expects to hit its target earnings for next year, raising questions about why executives trust it so much. their forecasts despite being in the middle. From a public health crisis.

"We are certainly aware that the current environment is extremely turbulent, however we believe the goal is achievable and remains an appropriate goal," said David Courani, Cigna CEO, in response to an analyst's question on why what executives are replicating the 2021 projections., very.

The main motivation is that fewer Americans are seeking traditional treatment options amid orders to stay home and limit the spread of the virus. This is a frustrating use, a boon for insurance companies.

"The vast majority of hospitals in the country are less crowded today than they used to be, and the cost to the insurance company for cases in those hospitals is lower," David Windley, an analyst at Jefferies, told Health Care Dive.

The nation's hospital chains revealed that numbers had declined in the final weeks of March as states and municipalities across the country implemented restrictions on social gatherings and frozen elective measures.

However, some are even more skeptical about the insurers' forecast for the year given the long way to go.

"Just because the first quarter looks positive for insurers does not mean this trend will continue this year or next, especially as pent-up demand increases," said Cynthia Cox, Kaiser Family vice president, Health Care Dive. .

Although insurers have maintained their annual guidance forecast, this does not necessarily show confidence, Dean Angar, vice president and chief credit officer for Moody's Investors Service, told Healthcare Dive. It seemed to her that the insurance companies had kept the orientation because there was much more unknown to offer something different.

Several companies have withdrawn other detailed guidelines that were measured because they maintained their position on earnings.

Insurance companies know that "the most important guideline for the street and analysts is to drive earnings." There are "many ways to control earnings per share. It is more controllable than any specific number," Ongar said, referring to share buybacks and limiting expenses if earnings are less than expected.

Although millions have fallen ill, insurers have not been overwhelmed by the sheer number of COVID-19 patients in terms of costs.

Any additional COVID-19 costs are mitigated by decreasing patient volumes, and Windley notes that the cost of pre-scheduled procedures and the COVID-19 case are not equal.

"The volume of paperwork has decreased a lot and it is not a one-to-one exchange," he said. "Losing a full knee, hip, or TAVR procedure is far higher than the cost of treating a COVID patient."

In short, insurers don't spend much of what they normally spend on members, especially in March and April and possibly even May.

But an important question remains: how quickly will the demand for health care return when Americans can resume aspects of daily life?

One of the nation's largest hospital chains provided some clues during this week's first quarter earnings call, describing May as the beginning of a recovery for its operations. T enet said it has already begun to resume elective procedures in some locations and noted that demand has increased "rapidly" amid backlogging of cases at the Department of Ambulatory Surgery, USPI.

More complex cases, such as the spine, total joints, and general surgical procedures, return more quickly, while cases of gastrointestinal diseases, pain, ears, nose, and throat return more slowly.

Tenet CEO Ron Rittenmeier said: "We view May as the beginning of recovery. We are excited to have opened multiple facilities with 50% of previous COVID surgeries last week and a more promising schedule this week." He added that the USPI had seen around 40% of pre-COVID cases as it had started reopening sites.

Centene CEO Michael Niedorf warned that the rest of the year could be volatile for the insurer, as it is difficult to predict when consumers will use healthcare services again. However, in their conversations with service providers, they told him that they are trying to get consumers back to the door as soon as possible so that patients do not lose trust in hospitals.

"Although I thought we would not see anything until July, third quarter, now we can see it in May and June will start to come back, which means there will be a more normalized MLR," he said of the lawsuit.

But one of the strangest trends is declining emergency volumes, especially outside of areas like New York that aren't overcrowded with COVID-19 patients. It's a topic on the minds of healthcare executives, Windley said, and it didn't seem to have a clear explanation.

People definitely don't experience fewer heart attacks or strokes.

"The hardest thing to explain is why the ER is so small," Windley said. It's a trend that can dampen expectations of a return to normalcy.

However, Ungar said he will likely reveal how many people use the ER as a doctor's office, which he said has been a real struggle for the industry.

Another university card is the hospital capacity. "The return of this deferred care to the system is also limited by the capacity of the system. There is not enough lax in the health care system to allow all of this deferred care to return quickly in 2020 regardless of when consumers are ready to return." , Bradley Ellis, Senior Manager For Fitch's North American Insurance Ratings, HealthCare told Dave.

Payers Prepare to Switch to Medicaid and Disbursement Plans Amid Record Unemployment

With unemployment rates at new records, some insurers are preparing to increase enrollment in the Medicaid business ledger as well as Affordable Care Act exchange plans.

Policy experts say high unemployment as a result of business closings to slow the spread of the virus could dramatically change the health insurance landscape, as most Americans obtain coverage through their work.

Between 25 million and 45 million Americans can lose their job coverage, according to a study by the Urban Institute.

However, not everyone who loses employment-based coverage will be left uninsured, in large part due to the ACA and the coverage options available.

Depending on the state, some may take advantage of Medicaid, while others may consider exchange plans.

"With historic levels of unemployment approaching, millions of workers and their families are on the brink of losing employer coverage," Kathryn Hempstead, senior policy advisor for the Robert Wood Johnson Foundation, said in a statement. "Our safety net is about to be tested and will work best in states that have expanded Medicaid."

Molina, Centene and Anthem said they expect an increase in their Medicaid membership and product sharing, to what extent is unclear.

Molina executives said in April that they had already seen 30,000 additional Medicaid members from the prior year period, although CEO Joe Zubretsky said that was because states were suspending eligibility decisions or failing to fire people who might not. do what. qualified. If countries plan to suspend these programs, Medicaid will have fewer members.

Policy and coverage changes
All major insurers waived cost-sharing (contributions, deductions, and coinsurance) for testing, and some have canceled cost-sharing for all COVID-19 treatments. In various ways, all major insurance companies have relaxed prior authorization requirements to expedite access to care. Some pay for telehealth at the same rates as in-person visits.

Payers have also accelerated payments to struggling service providers after major business lines were temporarily closed in response to the pandemic.