As the country's major health insurers finished reporting their financial results from the fourth quarter of 2019 this week, a few themes emerged. Every major payer reported an uptick in their medical cost ratios and many boasted of increased enrollment.
The ratio is an important measure that compares the amount an insurer brings in from premiums to the amount it spends on members' care. Payers have noted that the suspension of the health insurer fee in 2019 negatively affected medical cost ratios, as they typically passed on the fee in the form of higher premiums.
However, Centene, Cigna and Molina also said their individual business segment contributed to a higher ratio.
Centene, which commands the largest market share of ACA members, said more of its members were using services, though the payer cautioned the visits were routine and not for inpatient stays or specialist visits.
Meanwhile, Anthem said flu-related costs also attributed to the increased medical cost ratio during the fourth quarter. UnitedHealthcare reported an uptick for its full year, but did not break out its fourth quarter.
Medicare Advantage enrollment surges
Humana clocked its largest year-over-year increase in over a decade in the MA program, covering 3.6 million members by the end of 2019, representing a 17% jump.
This government line of business is becoming increasingly important for payers as it represents a real growth area for them compared to commercial segments.
CVS CEO Larry Merlo said Aetna's MA membership grew over three times the industry average in 2019, covering a total of 2.3 million people at year's end, up 32% year over year.
UnitedHealth CEO David Wichmann also touted its MA business and said the fourth quarter was "our strongest Medicare Advantage results ever."
ACA membership not swayed by modest savings
Even after lowering prices to attract more members to Affordable Care Act marketplace plans, Molina's CEO said fewer shoppers switched to its lower-cost plans. Because of this, Molina did not attract the market share it had hoped for in 2020 and now expects margins to be cut in half.
He pointed out, however, that as fewer members switch it shows more are sticking with their plans.
It's a trend competitor Centene has also experienced and commented on throughout 2019. Centene CEO Michael Neidorff noted in July that its ACA members were staying longer in their plans and fueling the rise in the medical cost ratio. At the time, he declined to answer questions about why members were staying longer.
But Molina's CEO provided some insight this week: "As members stay with you longer they're probably more chronic and heavy users of healthcare services and less likely to move."
Here's what industry saw from payers in the last quarter of 2019.