- Cigna said in its first-quarter earnings report on Friday that infected patients in the period were far less sick, or had substantially lower severity, than earlier in the pandemic, which led to lower treatment costs. That's even as COVID-19 cases reached a pandemic high in January.
- The insurer's profit in the quarter rose 2% to $1.2 billion, while revenue increased 7% and membership grew 7% to a total of about 18 million medical members.
- The results spurred Cigna to raise its expectations for full-year adjusted operating income to $7.05 billion, an increase of $100 million from its prior forecast.
The omicron variant fueled a spike in cases and hospitalizations in January, which have weighed on hospital operators' costs as they continue to pay for pricier labor.
Even amid another COVID-19 surge in January, Cigna executives said medical costs were better than their expectations due to lower COVID-19 testing and treatment costs.
Cigna's medical loss ratio – an important measure that compares the amount an insurer brings in from premiums to the amount it spends on care – was 81.5%.
Cigna's medical costs were well-controlled during the quarter and also beat analyst estimates, according to a note from Whit Mayo of SVB Securities on Friday.
At Cigna's pharmacy business unit, Evernorth, revenue increased 10% because of growth in the specialty pharmacy segment, which CEO David Cordani said "continues to represent one of the fastest growing parts of our health services portfolio."
Medical members rose overall, although the company did note a decline in its government business year over year, which was partially attributed to a sale in its Medicaid business.
The results are similar to other quarterly earnings from some of the nation's largest insurers, who have also increased financial forecasts for the full year.
In particular, Molina, an insurer primarily focused on government-sponsored insurance, noted its COVID-19 costs reached a peak at the start of the year but quickly subsided as cases waned.