Health Insurers Could Post Record Profit as Patients Stay Home

(Bloomberg) -- Second-quarter profits could prove to be the best ever for health insurance companies as delayed surgeries and doctor visits promise to keep costs in check -- for now.

a pair of glasses on a table: A stethoscope sits on an examination table in an exam room at a Community Clinic Inc. health center in Takoma Park, Maryland, U.S., on Wednesday, April 8, 2015. © Bloomberg A stethoscope sits on an examination table in an exam room at a Community Clinic Inc. health center in Takoma Park, Maryland, U.S., on Wednesday, April 8, 2015.

If analyst estimates are to be believed, industry bellwether UnitedHealth Group Inc. is poised to show record-high adjusted earnings per share when it becomes the first in the group to report quarterly results on July 15. Record-breaking profit reports may be in store for Anthem Inc. and Centene Corp. as well.

Loading...

Load Error

But when Americans resume seeking regular health-care services, costs will certainly pick back up for insurers.

Delayed Surgeries and Checkups Help Keep Insurers in Good Health

It “may be one of the biggest upside quarters for MCOs we see for some time,” RBC analyst Frank Morgan said of managed care organizations. The period could also be a “low point” for medical loss ratios -- a measure of how much insurance premium goes toward paying medical providers. The lower the ratio, the better for insurers’ profits.

But while Covid-19 wanes in some places and infections surge in states such as California, Texas, Florida and Arizona, a recovery in surgical procedures is anyone’s guess. Estimates compiled by Bloomberg suggest third-quarter earnings will drop off from second-quarter highs.

Given the uncertain outlook, companies may offer “conservative” forecasts for the rest of the year, Morgan wrote in a note to clients.

“While there are questions about the longer-term trade for the group given the ultimate impact of Covid on the economy and even the outcome of the Presidential election, we believe investors will stay with their positions given the near-term potential for earnings upside, especially considering that valuations are still well off peak highs,” Morgan wrote.

Separately, Goldman Sachs analyst Robert Jones, who started coverage on the sector in June, said with managed care companies trading at historical lows on a price to earnings basis, and muted political risks, “this could be an opportunity to buy the stocks.”

For more articles like this, please visit us at bloomberg.com

?2020 Bloomberg L.P.

Continue Reading
Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article.
TOPICS FOR YOU
Feedback

Found the story interesting?

Like us on Facebook to see similar stories


Send MSN Feedback

We appreciate your input!

Please give an overall site rating:

动物老虎机压分技巧 湖南幸运赛车开奖视频直播 体育彩票怎么玩法介绍 昨天福建快3三开奖结果 南粤风采26选5奖金多少 手机五分赛车彩票是骗局吗 每日黑马股票推荐 陕西快乐10分遗漏数据真准网 排列五和尾振幅走势图 北京快三开户 青海体彩11选5分布 幸运飞艇规律计划图 意大利pk10怎么玩能 宁夏十一选五前三值走势图 福彩北京快乐8官网 炒股入门与技巧k线图 山东群英会胆拖玩法