The second-quarter earnings season is in the books, and eight of the largest insurers brought in an impressive haul.
For the first half of the year, insurers brought in a total of $285.2 billion revenue, compared to $264 billion at the same point last year.
Total earnings were also up substantially, from $13.4 billion in the first half of 2017 to more than $16.6 billion in the first six months of 2018.
UnitedHealth Group maintained its spot as the top-earning insurer, but after that, the field was substantially shaken up. Aetna jumped to second place from fifth last year, with an increase of $1.59 billion in net income to a total of $2.4 billion.
Molina also displayed an impressive comeback, coming back from a $153 million loss last year to $309 million in net income this year. Interestingly, it achieved that comeback despite almost flat revenue growth; The insurer only brought in $26 million more revenue than last year.
Not every insurer was so fortunate. Humana, in particular, saw a large drop in earnings from last year, when it hit third place in net income with $1.8 billion. This year, it made just $684 million.
Of course, since the insurer's revenue grew healthily over the same period, the drop in income is likely tied to its spending spree this year.
Molina's comeback is a more complicated story. Leaking money last year, the insurer decided to fire its CEO and CFO and pull out of two states' ACA marketplaces. That ouster was quite the shakeup for the company, as the two executives, CEO J. Mario Molina and CFO John Molina, were founding members. As of February this year, the Molina family no longer has any official ties to the company.
However, despite continuing to report a loss in the second half of 2017, pulling back its marketplace footprint and raising premiums now seems to have done the trick. Per-member per-month premiums increased 41% over the same six-month period last year, and medical costs declined to the point where the company is no longer meeting its 80% medical loss ratio threshold required by the ACA.
“This company had inconsistent processes,” Joseph Zubretsky, the company's new CEO, said on last week’s earnings call. “It had, in some cases, poor execution in some of our local health plans and by a rigorous performance management process, leading indicators that identify the number of authorizations that are going in, so that we can head off high acuity inpatient trends that are emerging, all of these are contributing to the very favorable medical care ratios that we're experiencing in the first half.”