Major national health insurers largely increased their financial outlook for the year in the first quarter, despite warning that plenty of uncertainty remains around the impacts of COVID-19.
UnitedHealth Group was the most profitable company in the first quarter by a wide margin, bringing in $4.9 billion in earnings. The next-highest earner, CVS Health, reported $2.2 billion in profit.
Due to its financial performance, UnitedHealth boosted its earnings guidance for the year to between $18.10 and $18.60 per share. However, the company warned that they were building about $1.80 in unfavorable impact related to COVID into that estimate.
Continuing impacts included "testing and treatment costs; the residual impact of people having deferred care in 2020; and unemployment and other economy-driven factors," UHG said in the release (PDF).
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"COVID-19 treatment and testing during the quarter was higher than expected, paired with higher elective care deferral patterns," the company said."UnitedHealth Group is focused on encouraging and helping people to obtain the care they need, including vaccinations, and expects a continued rise in provision of care as the year progresses."
UnitedHealth's analysis was echoed by its rivals in their own reports. Centene CEO Michael Neidorff told investors on the company's earnings call that while it was experiencing some tailwinds related to the pandemic, such as increased marketplace enrollment due to a lengthy special enrollment period, plenty of uncertainty remains moving forward.
"This is a year with unique drivers … which we cannot be certain can continue throughout all of 2022," Neidorff said.
Despite that, Centene, which brought in $699 million in profit for the quarter, also boosted its earnings outlook for the year to between $5.05 and $5.35 per share.
The insurer rebounded from a loss in the previous quarter, as did Humana, which posted $828 million in profit for the first quarter of 2021. Humana was the only major national payer not to raise its guidance for the year, instead choosing to stay the course.
Humana expects between $21.25 and $21.75 in earnings per share this year. The payer said in its earnings release (PDF), however, that it made the projection "while acknowledging the continued heightened uncertainty surrounding the ongoing pandemic."
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Anthem posted $1.7 billion in profit for the first quarter and also raised its guidance, expecting more than $25.10 per share in earnings. However, it said in its release (PDF) that it expects $1.05 in unfavorable impacts this year.
A bright spot for Anthem? Its government business, especially Medicare Advantage. Its competitors reported similar results, including upticks in Medicaid managed care enrollment to offset some noted declines in commercial membership.
Anthem CEO Gail Boudreaux said MA enrollment was up 50% year-over-year in the first quarter.
CVS executives also said that the healthcare giant would boost its outlook for the year, raising it to between $7.56 and $7.68 per share. CEO Karen Lynch said that the company's role in administering COVID-19 tests and vaccines has lured in new customers.
Lynch said that 9% of customers new to CVS for a COVID test later returned to a pharmacy to fill a prescription.
Cigna also raised its guidance to at least $20.20 per share, though it is building in net unfavorable impact due to the pandemic as well. The insurer reported $1.2 billion in profit for the quarter.
"This outlook includes approximately $1.25 per share in net unfavorable impacts of COVID-19," Cigna said in its earnings release.