MLR Pressures Continued to Irk Select Medicaid, Medicare Insurers in 3Q

  • Nov 07, 2024

    As major publicly traded insurers reported third-quarter 2024 earnings results in recent weeks, familiar issues continued to impact select government players. For one, Medicaid managed care organizations are still feeling the pain of a sicker population resulting from redetermination efforts, although executives during recent earnings calls hinted at signs of stabilization. At the same time, medical loss ratios (MLRs) continued to be affected by higher-than-expected utilization in Medicare Advantage, which was particularly pronounced for CVS Health Corp. 

    Reporting third-quarter earnings on Nov. 6, CVS Health said its MLR soared to 95.2%, compared with 85.7% a year ago. During a conference call held the same day, Chief Financial Officer Thomas Cowhey explained that the increase was largely due to increased utilization, higher acuity in Medicaid and the impact of lower Star Ratings for payment year 2024. The MLR increase included a 220-basis point impact from $1.1 billion in premium deficiency reserves recorded in the quarter, which is related to expected losses in the fourth quarter within the Medicare and individual exchange product lines, he added.

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  • Lauren Flynn Kelly

    Lauren has been covering health business issues since the early 2000s and specializes in in-depth reporting on Medicare Advantage, managed Medicaid and Medicare Part D. She also possesses a deep understanding of the complex world of pharmacy benefit management, having written AIS Health’s Radar on Drug Benefits from 2004 to 2005 and again from 2011 to 2016. In addition to her role as managing editor of Radar on Medicare Advantage, she oversees AIS Health’s publications and manages the health editorial staff. She graduated from Vassar College with a B.A. in English.

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