Cigna saw utilization 'closer to normal' in June, expects similar trends in July despite COVID-19 spikes

A sign at the front of Cigna's headquarters
Cigna released its second-quarter earnings report Thursday morning. (Cigna)

Cigna executives said that health utilization crept back up toward the end of Q2, with June appearing "much closer to normal."

And early trends suggest that will continue through July, despite spikes in pandemic cases in several regions across the country. Cigna's utilization rate declined between 30% and 35% in April, but has climbed back up steadily since, said Chief Financial Officer Eric Palmer on a call with investors Thursday.

He said there's plenty of regional variance in healthcare use depending on how COVID-19 is spreading.

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"I'd say our early indicators for July are pretty consistent with June," Palmer said, "so still some impact moving through different geographies, but at this point we'd say July looks an awful lot like June."

Insurers have fared quite well financially amid COVID-19, as decreased healthcare utilization lowered spend significantly. However, they expect to see that change in the second half of the year as care utilization begins to return to pre-pandemic levels and patients receive procedures they deferred in the beginning of 2020.

Cigna generated $1.8 billion in profit during the second quarter, up from $1.4 billion in the prior-year quarter.

The insurer released its quarterly earnings report (PDF) Thursday morning, which also showed it brought in $39.3 billion in revenue in the second quarter. Revenues were up from $38.8 billion in the second quarter of 2019.

Cigna beat Wall Street estimates on both earnings and revenue.

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“Our stakeholders are facing unprecedented challenges from the pandemic, uncertainty of a disrupted economy, and pain of racial tensions and inequality," Cigna CEO David Cordani said in a statement. "We are proud of the actions we have taken to provide innovative programs and services and expanded financial support, all while delivering sustained, attractive financial performance and generating substantial cash flows that fuel our offerings for the benefit of all we serve.”

Cigna has earned $77.7 billion in revenue and $2.9 billion in profit over the first half of the year, according to the report.

The insurer reported 17.1 million health plan members, a slight increase year over year but down from 17.2 million at the end of the first quarter. The declines were from its commercial business segment, in which membership dropped from 14.1 million to 14 million.

Express Scripts membership, meanwhile, is growing, Cigna said. The pharmacy benefit manager has added 9 million new members over the first half of the year, reaching 84.9 million.

Cigna expects full-year revenue for 2020 of between $154 billion and $156 billion and full-year earnings of between $18 and $18.60 per share.

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