Health Plan Weekly

The Cigna Group on Oct. 31 posted third-quarter results that exceeded most analysts’ projections, bucking the industry trends that other managed care organizations have revealed in recent weeks. Unlike those insurers, Cigna does not have a significant Medicare or Medicaid business, both of which have seen higher-than-expected utilization this year and reimbursement rates that are not enough to offset the increased costs.  

For the quarter, Cigna had a medical loss ratio (MLR) of 82.8%, just below the Wall Street consensus of 82.7%. It also had adjusted earnings per share (EPS) of $7.51, above the $7.23 consensus. Cigna also reiterated its full-year guidance of an MLR between 81.7% and 82.5% and adjusted EPS of at least $28.40. 

Humana’s third-quarter 2024 earnings results were better than many analysts feared, driven by higher-than-expected Medicare Advantage (MA) revenue and outperformance of the company’s CenterWell clinics. 

For the quarter ending Sept. 30, Humana reported adjusted earnings per share (EPS) of $4.16, beating Wall Street’s consensus estimate of $3.42. The company’s consolidated medical loss ratio (MLR) of 89.8% was in line with the consensus estimate. During an Oct. 30 conference call to discuss quarterly earnings, CEO Jim Rechtin noted that the company slightly improved its 2024 EPS outlook from “approximately” $16.00 to “at least” $16.00. This was in sharp contrast to the company’s second-quarter release, which saw the company’s stock tumble more than 10% on the news of higher-than-anticipated inpatient admissions and the company not raising its full-year guidance. 

With more Medicare Advantage plans tailored to specific populations such as racial minorities and the LGBTQ+ community, insurers are doing a better job serving historically underserved groups, according to speakers at a recent Johns Hopkins University webinar. Sachin Jain, M.D., CEO of SCAN Health Plan, said the tailored plans “have a ton of potential,” but he cautioned that the offerings are in the “first inning” and are mixed in terms of their effectiveness and differentiation from more standard plans. 

“I think some of the execution has been really good, and some of it’s been really shallow,” Jain said. “Shallow looks like websites that are translated using outside vendors to mimic the language of the beneficiaries that they were targeting, and then excellent looks like plans that are actually contracting with specific provider networks, thinking differently about their benefits, thinking differently about the overall messaging.” 

Centene Corp. and Molina Healthcare, Inc., two of the largest managed Medicaid insurers in the U.S., both beat expectations in their third-quarter earnings reports. While the companies saw higher care utilization among their Medicaid members, their medical loss ratios (MLRs) were better than investors anticipated.  

Wells Fargo analyst Stephen Baxter in an Oct. 25 note wrote that Centene’s Medicaid MLR of 93.1% was below the Wall Street consensus of 93.3% and “much better than feared.” Baxter also wrote in an Oct. 24 note that Molina’s Medicaid MLR of 90.5% “was above guidance but by less than feared” following UnitedHealth Group’s and Elevance Health, Inc.’s earnings releases from earlier this month.