Insurers saw sky-high profits in Q2. Now, Congress wants to take a look at their finances

Finance earnings stock ticker graph
We take a look back at health insurers' financial performance, including soaring profits, in Q2. (Getty/monsitj)

Soaring profits was the defining trend in the second quarter among health insurers, an anomaly in the healthcare industry as it has been slammed by the COVID-19 pandemic.

Sharp declines in healthcare utilization proved a major boon across the board for health plans, in contrast to for-profit providers that would have floundered without relief funding from the federal government.

The highest profit earner for the quarter was UnitedHealth Group, which raked in an eye-popping $6.6 billion in earnings in the second quarter. In second place was CVS Health, which earned $3 billion in profit.

For UnitedHealth, this was more than double their profit in the second quarter of 2019. Anthem and Centene also saw their profits double year over year.

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Anthem brought in $2.28 billion in profit for the quarter, while Centene earned $1.2 billion. Cigna and Humana both earned $1.8 billion in second-quarter profit.

Molina Healthcare earned $276 million in profit for the second-quarter of 2020.

Health insurers' profitability amid the pandemic has drawn plenty of attention, with the House Energy and Commerce Committee launching an investigation into their financial performance.

Commitee Chairman Rep. Frank Pallone, D-New Jersey, said in a statement that he believes the sky-high profits suggest payers aren't doing enough to help address the challenges posed by COVID-19.

"I want to know if they‘re in compliance with existing statute requiring COVID-19 testing be free of consumer cost-sharing for all patients and how they intend to use their profits to help the American people during this time of crisis," Pallone said.

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In response, America's Health Insurance Plans (AHIP), the industry lobby, released a lengthy statement highlighting the efforts of health plans during the pandemic. For example, plans have waived member cost-sharing for testing and treatment of COVID-19, along with offering enhanced and often free telehealth programs.

The pandemic response is a "marathon, not a sprint," AHIP said, and the virus and its impacts will not just suddenly vanish.

"Every American deserves affordable, comprehensive coverage that provides them with access to safe and convenient care and peace of mind.  From the start of the COVID-19 pandemic and as the nation is still confronting its devastating effects, health insurance providers have been and continue to be fully committed to helping solve this crisis," AHIP said. "We are taking decisive action through concrete, measurable steps to aid Americans and reduce their burdens during this time of need—and beyond."

Insurers have also cautioned investors throughout the quarter that their soaring profits are not likely to last through the rest of the year. For one, there's the likelihood of significant rebates to balance out medical loss ratios amid declined care use.

In addition, demand for care is increasing and is nearing pre-pandemic levels. Cigna executives, for instance, said utilization in June was "near normal," and they expected that trend to continue.

Providers are also beginning to offer deferred elective procedures, which will increase claims costs.

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