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Expand chart
Data: Company filings; Chart: Naema Ahmed/Axios

Almost all of the major health insurance companies are spending more on medical care this year than they have in the past.

The big picture: Rising prices and more services for some sicker patients are among the many reasons why this is happening. That uptick in spending has freaked out Wall Street, even though insurers are still quite profitable.

Driving the news: Almost all of the eight major publicly traded insurers have shown their medical loss ratio — the percentage of premium revenues they're spending on medical claims — is rising this year.

  • UnitedHealth Group, the largest insurer in the country, said its loss ratio was 82.4% in the third quarter this year compared with 81% in the same period a year ago.
  • But these companies are handling billions of premium dollars, so any increase in medical claims equates to hundreds of millions of dollars in additional spending, which they don't want.

Between the lines: Medical loss ratios are often higher for health plans that cover more older adults, the disabled and the poor, because those groups typically need more care or are in the hospital more frequently.

But costs have been climbing in some commercial markets, too.

  • Anthem executives admitted on their earnings call that the company is dumping some employers with workers who had medical needs and costs that were too high.
  • CVS Health, which now owns Aetna, previously said some middle-market clients had employees that it thought were getting too many services and drugs.
  • CVS "intensified our medical management in those geographies," an executive said on the earnings call.

The bottom line: Health insurance companies closely track their medical loss ratios and aim to hit those targets most often by charging higher premiums, denying care, forcing people to use lower-priced providers or declining to cover people they deem to be too expensive.

Go deeper

Asymptotic Florida students exposed to COVID no longer have to quarantine

Florida Gov. Ron DeSantis during a September news conference in Viera, Fla. Photo: Paul Hennessy/SOPA Images/LightRocket via Getty Images

Florida Gov. Ron DeSantis (R) announced Wednesday an emergency order allowing parents to decide whether their children should quarantine or stay in school if they're exposed to COVID-19, provided they're asymptomatic.

Why it matters: People infected with COVID-19 can spread the coronavirus starting from two days before they display symptoms, according to the CDC. Quarantine helps prevent the virus' spread.

Federal judge: Florida ban on sanctuary cities racially motivated

Florida Gov. Ron DeSantis. Photo: Joe Raedle/Getty Images

A federal judge on Tuesday struck down parts of a Florida law aimed at banning local governments from establishing sanctuary city policies, arguing in part that the law is racially motivated and that it has the support of hate groups.

Why it matters: In a 110-page ruling issued Tuesday, U.S. District Judge Beth Bloom said the law — signed and championed by Gov. Ron DeSantis (R) — violates the Constitution's Equal Protection Clause because it was adopted with discriminatory motives.

Biden steps into the breach

Sen. Joe Manchin heads to a meeting with President Biden today. Photo: Kevin Dietsch/Getty Images

President Biden ramped up the pressure on his fellow Democrats Wednesday, calling a series of lawmakers to the White House in the hope of ending infighting and getting them in line.

Why it matters: Divisions within the party are threatening to derail Biden's top priorities. After several weeks of letting negotiations play out, the president is finally asserting his power to ensure his own party doesn't block his agenda.

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