Health insurers aren't that worried about coronavirus
Health insurance companies are not concerned yet that the new coronavirus is going to drive up their medical claims and spending.
The big picture: More people will need expensive hospitalizations to treat COVID-19, which has turned into a full-blown public health emergency. But insurers view the outbreak as an "extension of the flu season," according to a Wall Street bank that spoke with insurance executives last week.
What they're saying: Barclays held its health care conference digitally last week, and several insurance executives reiterated their companies' profit projections for this year — relatively remarkable statements considering economists believe a recession is imminent.
- "We're not expecting a material financial impact," said Matt Manders, a top Cigna executive.
Between the lines: A lot more cases and hospitalizations are coming. But those will be partially offset, from an actuarial perspective, by delays or cancellations of costly elective procedures like joint replacements — something that hospitals are starting to do.
- "There is a net saving" when nonemergency procedures are eliminated, Anthem CFO John Gallina told Barclays analysts.
The bottom line: The coronavirus is throttling almost every business in America. Large insurers think they're mostly immune, and if medical claims start to rise uncontrollably, they will increase everyone's premiums next year.
- "We would price for this for 2021 to the extent there's any meaningful impact," Humana CFO Brian Kane said. "I would imagine the industry will as well."