Unexpected Health Insurance Profits and the COVID-19 Crisis

Abstract

The coronavirus disease 2019 (COVID-19) pandemic has placed unprecedented financial stress on most of the US health care system, including physician practices, emergency medical service systems, and hospitals. But there is one notable exception: health insurance companies. Sharp declines in elective care during the pandemic have reduced health care expenditures and contributed to earnings that are twice as large as those earned last year. For example, the UnitedHealth Group's

The growing epidemic of insurance denials: A frontline perspective

“…Finally, as we continue in our fight against the Covid‐19 pandemic, we call upon the payors to invest some of their record gains 3 to improve their own denial systems—as a measure to alleviate these unnecessary burdens on healthcare workers and healthcare systems already under immense stress.…”

“…Further, hospitals and health systems should attempt to proactively define rules of engagement during the denials process in their contracts with payorsincluding limiting the number of denials, timeliness and ease of scheduling discussions and rules for professional behavior during discussions. 6 Finally, as we continue in our fight against the Covid-19 pandemic, we call upon the payors to invest some of their record gains 3 to improve their own denial systems-as a measure to alleviate these unnecessary burdens on healthcare workers and healthcare systems already under immense stress.…”

“…In 2020, the Covid‐19 pandemic led to unprecedented operational stress for hospitals, 1 burnout for healthcare workers 2 and profits for payors 3 . 2020 was also notable for acceleration in the practice of payors denying reimbursement for services provided by hospitals and clinicians.…”

“…In 2020, the Covid-19 pandemic led to unprecedented operational stress for hospitals, 1 burnout for healthcare workers 2 and profits for payors. 3 2020 was also notable for acceleration in the practice of payors denying reimbursement for services provided by hospitals and clinicians. In an analysis of claims data from 1500 hospitals, reimbursement denial rates during the pandemic increased 23% as compared with 2016.…”

Health Care Payers COVID-19 Impact Assessment: Lessons Learned and Compelling Needs

“…Calls for payers to take action were amplifi ed after fi nancial records indicated that prominent insurers registered medical loss ratios (MLRs) below 80% and also realized substantial profi ts during the Published May 17, 2021 second quarter of 2020 due to pandemic-induced declines in utilization [73,74,75]. While payers who meet government-determined criteria for MLRs will be required to provide consumers with rebates, the broader increase in gross margins per member per month (e.g., 35% increase in Medicare Advantage) spurred calls for health plans to increase their contributions to health system and public health needs [27,76].…”