Jul 25, 2019

Wall Street punishes Anthem after positive earnings report

Photo: Photo by Drew Angerer/Getty Images

Anthem posted better-than-expected earnings and raised its profit expectations for the rest of 2019, so Wall Street responded by … selling off the stock, dropping Anthem’s share price by 4.5%.

What's happening: Investors are freaking out because the big health insurance companies — UnitedHealth Group, Centene and now Anthem — have indicated their medical costs are rising faster than projected.

By the numbers: One of the most highly watched metrics for insurers is the medical loss ratio, which shows how much of members' premiums are going toward paying medical claims.

  • Anthem’s MLR in the second quarter was 86.7%, meaning almost 87 cents of every premium dollar went to cover someone’s medical expenses. That was higher than the 85.8% that Wall Street analysts had expected.
  • 0.9 percentage points may seem like a small difference, but that translates to roughly $200 million in unanticipated claims, given how large Anthem is.

Anthem argued that health care expenses aren’t rising wildly, but instead states are not paying high enough Medicaid rates to their plans.

The bottom line: Wall Street's latest sell-off is yet again obscuring the financial and political power insurers enjoy.

Go deeper: Wall Street has kind of soured on health care

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Rates for Affordable Care Act plans aren't going up much

Illustration: Sarah Grillo/Axios

Premiums for Affordable Care Act coverage are going down in some places, and barely rising in others.

The big picture: Health insurers raised ACA rates dramatically over the past few years, largely due to political chaos. But their plans have still proven to be extremely profitable. Now many companies are lowering premiums as they expect to send money back to their customers.

Go deeperArrowAug 22, 2019

Hospitals winning big state battles

Illustration: Aïda Amer/Axios

Several states have made ambitious attempts to address health care costs, only to be thwarted by the hospital industry.

Why it matters: States' failures provide a warning to Washington: Even policies with bipartisan support — like ending surprise medical bills — could die at the hand of the all-powerful hospital lobby.

Go deeperArrowAug 15, 2019

A small group of patients account for a whole lot of spending

Illustration: Rebecca Zisser/Axios

A very small group of patients with major illnesses is responsible for an outsized share of health care spending, and new data show that prescription drugs are a big part of the reason their bills are so high.

The big picture: Among people who get their coverage from a large employer, just 1.3% of employees were responsible for almost 20% of overall health spending, averaging a whopping $88,000 per year.

Go deeperArrowJul 29, 2019