A coronavirus testing tent outside a hospital in Massachusetts. Photo: Barry Chin/The Boston Globe via Getty Images
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."