While many people assume that the health insurance market is in a state of stasis while various political battles wage on in Washington D.C., that simply isn’t the truth. Even though the future of health care litigation remains in doubt, the country’s largest health insurers reported strong profits in the second quarter of 2017.
In total, the six largest health insurers in the country reported a combined profit of roughly $6 billion dollars during Q2. That’s a 29% increase over profits from the same time last year. Of those six companies, Aetna, Humana, and Ciga all saw profits up 45% from the previous year. UnitedHealth Group and Centene all saw their profits rise about 25% in the same time period, and Anthem saw an increase of 2%. All of this growth allowed each of these insurers to reach record stock highs over the summer.
There are a number of factors driving this growth. Primarily boosts from government health plans like Medicare and Medicaid, as well as falling medical costs. Aetna, derives more than half of its revenue from government plans. With such massive numbers riding on policy decisions in Washington, the consensus among insurers now, is that the most profitable decision is to wait it out as long as possible wherever the ACA is concerned.
The increasingly popular high-deductible health insurance plans have played a major role in driving medical costs down. If this trend continues, we can expect to see more and more high-deductible plans advertised to the general market.
All of this has to be considered with one huge caveat—the political climate could turn all of this upside down any day. With the 2018 ACA markets slated to open in less than three months, many major insurers are waiting to release their ACA compliant plans as most are uncertain what steps the Trump administration will take in these next weeks.