America’s five largest health insurers gained $11 billion in profits amid the coronavirus pandemic, and this was largely enabled by covid-19 fears by Americans acquiring medical services. These health insurance companies collect monthly funds from their clients depending on their chosen subscription or health care package. A health insurance company keeps on collecting money whether the client comes for services or not, so the finances continuously accumulate for an insurer. The pandemic has prevented many people from accessing medical services or even going to the doctor’s office. With the covid-19 travel and gathering restrictions, everyone is encouraged to stay behind doors unless urgent care is needed.
Due to this, health insurers are less likely to deliver any services and earn those monthly subscriptions as profits earned. The $11 billion profit margin obtained this year falls short of the 2020 gains recorded within the same period, but health insurers’ profits are still significant. Profits surged drastically last year because clients were not willing to seek any medical care fearing covid-19. But this did not deter them from paying for health insurance every month and in full. Thus enabling providers to gain more money without incurring any expense in delivering medical care for the clients. The companies have reported that up to date, the medical care demand is yet to return to normal levels.
After profiting a lot at the expense of people, the insurers were investigated in terms of their conduct because some companies registered double profits from 2019 [Source]. The pressure was witnessed at government health institutions mainly funded by revenue from taxpayer money, while these subscription-based facilities basked in the profits’ glory. The investigation was carried out by the House Energy and Committee in August last year [Source] to examine the policies and practices by insurers in regards to the consumers’ well-being. In launching the inquiry, the Committee wrote to the companies saying, “These developments raise important questions about the extent to which the insurance industry may be profiting off the pandemic while simultaneously taking action to reduce access to free COVID-19 testing.”
The Committee revealed its intention in a statement which stated that “We write to request information about your company’s coverage policies and practices for COVID-19 tests and related items and services. Additionally, we are requesting information on whether these increased profits are being used to provide consumers relief, such as through premium reductions, rebates, zero cost-sharing for COVID-19 treatments, or other financial assistance.”
But the findings of this investigation never made it to a public forum, and it comes as no surprise that in 2021, these insurers are still profiting by big margins. From an onlooker’s perspective, the current global crisis has brought good fortunes to them, and the more intensified it gets, the more profits they gather.
Dr. Joshua Sharfstein, a public health school’s vice dean for public health practice and community engagement, highlighted how public health departments struggled to find any “funds for contact tracing, testing,” but local insurers continue to enjoy a financial boost. In his article published in the Journal of the American Medical Association [Source], he said, “I think part of the dysfunction of the US response was the fact that money was accumulating in one part of the healthcare universe while it was desperately needed in another part,” and this points to mismanagement of funds which might be linked to administration issues. Dr. Sharfstein proposed that insurers’ profits be used in public health funding instead of taxpayer money.
Financial reports released in July showed that UnitedHealth Group gained $4,37 billion in profits, and it tops the other health insurers. Anthem managed to get $1,8 billion in the reports, and Humana dropped its profits by 68.7% to $588 million. Cigna attained $1,47 billion, and CVS Health had $2,78 billion [Source], which means these companies are milking more from the corona effects. But under the Affordable Care Act, clients might benefit from their monthly payments to health insurers. The Act doles out a margin where insurers are not supposed to exceed when spending their profits, and the remaining money categorized as ‘excess’ should be paid to customers in rebates. In April, the Kaiser Family Foundation reported that due to profits earned, rebates to be paid might amount to $2,1 billion this year.
In recent weeks, the US declared a public health emergency because of the Delta Variant, causing a surge in positive cases and deaths. This might perpetuate the ‘profiting’ ground for health insurers until the end of the year.
