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Blue Cross Blue Shield health insurance companies have more than quintupled their net profits in the first half of this year compared with the same six months of 2016, according to an analysis of financial records by Fitch Ratings.

The bottom line: We reported over the summer that the Blues, which have the most exposure to the Affordable Care Act marketplaces, are making a lot of money despite the Trump administration's threats and actions against the ACA. Why are profits still growing for the Blues? They raised premiums a lot, people are not going to the doctor or hospital as much, and the federal government modified some enrollment policies to the benefit of insurers.

Expand chart
Data: Fitch Ratings, Blue Cross and Blue Shield companies credit overview, Nov. 6, 2017; Chart: Andrew Witherspoon / Axios

The details: Fitch analyzed the first-half financial documents of 34 Blue Cross Blue Shield companies, including the publicly traded Anthem as well as other large Blues brands such as Health Care Service Corp. and Blue Shield of California. Almost every company improved its finances year over year, leading to the following aggregate financial data for the first six months of 2017:

  • $135 billion of revenue (up 7%)
  • $7.7 billion underwriting profit, or the amount of money made after subtracting medical costs from premiums paid (up 194%)
  • $6.5 billion net profit (up 441%)
  • 85.9% medical loss ratio, which reflects how much of the premium dollar is spent on medical care (down 0.8 percentage points)

What was true previously is still true now: Most health insurers are not currently losing their shirts on the ACA's individual marketplaces, although next year could be different depending on what happens to the law's cost-sharing subsidies. While the higher premium rates have not harmed people who get federal subsidies, they have caused more financial pain for middle-class people who have to pay the full cost of their health insurance.

Looking ahead: Congress delayed the ACA's health insurer tax throughout 2017 — another reason why companies have done so much better this year. Insurers have conducted a lobbying blitz to get Congress to repeal or delay that fee again, and legislation that would delay the tax for another two years could be folded into a year-end package.

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Dan Primack, author of Pro Rata
57 mins ago - Podcasts

Net neutrality on the line under Biden

Federal net neutrality rules are back on the table in the Biden administration, after being nixed by Trump, but now might be complicated by the debate over social media companies' behavior.

Axios Re:Cap digs into why net neutrality matters and what comes next with Nilay Patel, editor-in-chief of The Verge and host of the Decoder podcast.

House grants waiver for retired Gen. Lloyd Austin to lead Pentagon

Defense Secretary nominee Lloyd Austin Photo: Chip Somodevilla/Getty Images

The House voted 326-78 on Thursday to grant retired Gen. Lloyd Austin a waiver to lead the Pentagon, clearing the way for the Senate to confirm President Biden's nominee for defense secretary as early as this week.

Why it matters: Austin's nomination received pushback from some lawmakers, including Democrats, who cited a law that requires officers be out of the military for at least seven years before taking the job — a statute intended to reinforce the tradition of civilian control of the Pentagon.

Amanda Gorman steals the show on Inauguration Day

Data: NewsWhip; Chart: Axios Visuals

Poet Amanda Gorman by far generated the most average interactions on social media on Inauguration Day, according to exclusive data from NewsWhip.

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