May 23, 2017

Major Blue Cross Blue Shield insurer reverses ACA losses

Alex Brandon / AP

Health Care Service Corp. — the parent company of the Blue Cross and Blue Shield affiliates in Illinois, Montana, New Mexico, Oklahoma and Texas — recorded an $869 million profit in the first quarter of 2017, according to the company's latest financial documents. That was a $1.3 billion turnaround after HCSC lost $442 million in the first quarter of 2016.

How to interpret this: The Affordable Care Act exchanges in some areas are hurting, but overall are not imploding. Many insurance companies continue to do well (like Florida Blue) or are turning things around (like HCSC). And HCSC carries a lot of weight, since it covers nearly 1.1 million people in ACA plans and is the largest Blue Cross and Blue Shield company after Anthem.

What happened: A few one-time items inflated HCSC's profit. For example, Congress suspended the Affordable Care Act's health insurance tax for 2017, and accounting rules require an insurer to book the entire fee in the first quarter. But even without the one-time items, the insurer raised premium prices a lot, particularly for its ACA exchange plans, to offset costly medical claims.

"We still would've been profitable," said Carl McDonald, HCSC's divisional senior vice president of treasury and business development. "It's really been the individual business that's driven the turnaround this year."

HCSC had lost a lot of money in the ACA marketplaces, but took a couple fundamental steps to change its position:

  • Created narrow networks of hospitals and doctors, which HCSC emphasized last year.
  • Hiked premiums to account for how sick people in the individual market are.
  • Eliminating the ACA insurance industry fee is icing on the cake, which is why large companies are pushing for its permanent removal.

Looking ahead: McDonald would not say what the company was doing for 2018, as rate filing deadlines approach and uncertainty lingers around the ACA's cost-sharing subsidies for low-income people. "At this point, it's hard to say," he said.

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Inside the start of the great virus airlift

Illustration: Aïda Amer/Axios

A plane from Shanghai arrived at John F. Kennedy International Airport in New York Sunday morning carrying an extraordinary load: 12 million gloves, 130,000 N-95 masks, 1.7 million surgical masks, 50,000 gowns, 130,000 hand sanitizer units, and 36,000 thermometers.

Why this matters: The flight is the start of what might end up being the largest government-led airlift of emergency medical supplies into the United States.

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 10 a.m. ET: 681,706 — Total deaths: 31,882 — Total recoveries: 145,696.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 8 a.m. ET: 124,763 — Total deaths: 2,191 — Total recoveries: 2,612.
  3. Federal government latest: Trump announces new travel advisories for New York, New Jersey and Connecticut, but rules out quarantine enforcement
  4. Public health updates: Fauci says 100,000 to 200,000 Americans could die
  5. State updates: Alaska issues a stay-at-home order — New York tries to nearly triple hospital capacity in less than a month and moves presidential primary to June 23.
  6. World updates: In Spain, over 1,400 people were confirmed dead between Thursday to Saturday.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Fauci says 100,000 to 200,000 Americans could die from coronavirus

Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, said on CNN's "State of the Union" Sunday that models suggest the coronavirus will infect millions of Americans and could kill 100,000–200,000, though he stressed that the projections are "such a moving target."

Why it matters: Fauci has been the coronavirus task force's most outspoken advocate for emergency social distancing measures to stop the spread of the coronavirus, sometimes contradicting President Trump's more optimistic outlook.