Moody's: Health insurers off to strong financial start in 2019—but political uncertainties loom 

A bar chart showing positive business growth
Health insurers have started 2019 strong, according to a new analysis. (Getty/NicoElNino)

Health insurers’ financial performance is on a continuing upward trend, but political and legal risks could pose a threat to that growth, according to a new report. 

Moody’s Investors Services issued an analysis of first-quarter performance from the largest U.S. insurers and found strong membership growth and effective work to control costs and pricing. Membership figures were bolstered especially by Medicare Advantage enrollment, according to the report, where there was 14% growth year over year and 9.5% growth compared to the prior quarter. 

This isn’t necessarily new for the sector, Dean Ungar, senior analyst and one of the report’s authors, told FierceHealthcare. But the first quarter was strong overall. 

“They were particularly good in the first quarter,” Ungar said. 

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Of the eight insurers included in the analysis—Aetna, Anthem, Centene, Cigna, Humana, Molina, UnitedHealth and WellCare—none were given a negative credit implication rating for their performance, according to the report. 

However, despite a strong quarter for insurers, legal and political uncertainty is set to rear its head in a big way, the analysts said. For one, there are continued questions about the future of the Affordable Care Act—a federal judge declared it unconstitutional late last year, and the debate has been ongoing. 

Its future is in flux as the exchanges are becoming a profitable segment of business for insurers, Ungar said. 

Plus, ahead of the 2020 election, talk of significant overhauls to the healthcare system—including the single-payer "Medicare for All" proposals—are gaining steam among Democrats and progressives. 

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And pushing through Medicare for All or more incremental steps like a public option would require Democrats to command strong control of the government, Ungar said  

“I think in general the vast degree of uncertainty is not good for the industry,” Ungar said. “It’s not good for investors.”  

In addition, insurers have begun to adjust to changing demographics and the social determinants of health, but that will truly ramp up as the population continues to age, Stefan Kahandaliyanage, Moody’s analyst and another of the report’s authors, told FierceHealthcare. 

Seniors face a unique set of social issues, he said—loneliness and lack of transportation being two key examples—and insurers are adapting to those needs. Socioeconomic factors also play a key role in driving healthcare costs, so policy proposals changing coverage don’t necessarily get the macro-level factors, Kahandaliyanage said. 

“I don’t think a single Congress or election cycle … can solve that problem,” he said.