Following the release of Q3 financial reports, this week’s graphic takes stock of large health insurance companies’ recent financial performances. Nearly all the major payers reported higher medical loss ratios (MLRs) in Q3 2024 compared to Q4 2022. The MLR refers to the percentage of premium dollars spent on medical claims and quality improvements and is an important metric payers use to evaluate their operations. This upward trend has affected some payers more than others, with CVS’s MLR rising by more than 9% compared to UnitedHealth Group’s (UHG) 2.4% increase in this time frame. The only payer to report a decreased MLR was Cigna, which appears to be benefitting from its continued pullback from the Medicare Advantage (MA) market. Notably, payers have often cited higher utilization among MA patients—their previous blueprint for growth—as the leading reason for these rising costs. Additionally, relying on the profitability of other business segments to fuel future strategic investments may not be a sustainable plan for the two largest vertically integrated payers. Despite directing substantial resources into their non-insurance segments, nearly all these companies’ other business units have also been less profitable through Q3 2024, compared to the same period last year. After riding high for several years, the payers are showing signs that, despite their size, they are running into many of the same challenges as providers: rising drug costs, an aging population, and higher labor costs.
