4 Health Insurance Companies In The Spotlight Right Now

As the COVID-19 pandemic continues to wreak havoc on different business sectors, the health insurance industry is too not left unscathed by its adverse impact. Health insurance companies have been witnessing a drop in premium volumes as the unemployment level rose. A low-interest rate environment is affecting insurers’ profitability as well.

Further, a slowdown in global business and a decrease in Commercial business dented the margins of the companies.

Nevertheless, the health insurance industry is poised well for growth on the back of an aging American population. As situation is improving, the companies are expected to bounce back on the back of rising enrollment and top-line growth, increasing contribution from complementary businesses, product modifications, improved services, expansion of international operations, better claims handling, medical cost management, technological investment and upgrade, mergers and acquisitions, and healthy balance sheets.

The industry is continuously evolving with cross-industry M&A activity that is reshaping business profiles and reducing the number of players, which gives insurers greater power to negotiate with hospital and drug companies. For example, Centene Corporation (CNC - Free Report) acquired WellCare (in January 2020). The consolidated entity now has a wider scale and diversification with more than 12 million Medicaid and around 5 million Medicare members. In total, it has around 22 million members across 50 US states.

The companies in this industry could gain this year from a more gradual resumption of discretionary and elective care.

Moreover, Bernie Sanders’ exit from the presidential race has been a mojo for health insurers. Sanders’ policies haven’t been positive for health insurance stocks. He favored Medicare-For-All and intended to abolish private insurance, which were detrimental to health insurers’ interest.
In fact, now the presidential campaign narrows down to Joe Biden and the ruling President Trump. Both incidentally argued that proposals, such as Medicare-For-All are too costly, which is undoubtedly a win-win scenario for health insurers.

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