OLDWICK, N.J.--(BUSINESS WIRE)--In this episode of AMBestTV, Sally Rosen, senior director, and Joe Zazzera, director, both of AM Best, said more patients recovering at home resulted in lower-than-expected health insurance claims. Click on http://www.ambest.com/v.asp?v=ambhealth620 to view the entire program.
The first-quarter 2020 earnings of publicly traded U.S. health insurance companies are showing that the impact of the COVID-19 pandemic has been less severe than anticipated. Rosen said the timing of the surge in cases played a large role.
“The uptick of the whole coronavirus pandemic did not really occur until the second half of March,” said Rosen. “At that time, there was concern about the availability of personal protective equipment, as well as trying to flatten the curve, which resulted in numerous states issuing stay-at-home orders, and deferral of elective surgeries and non-routine or non-emergency care. This resulted in a decline in claims. However, because it happened so late in March, there was not much of an impact in the first quarter.”
“Additionally, the majority of individuals diagnosed with COVID-19 have self-quarantined at home. The claims from the hospital for those that have been hospitalized have been more than offset by the decline in regular routine care and elective procedures.”
Zazzera said an uptick of claims could occur starting in the second quarter, but to date, health insurers have affirmed their earnings guidance for 2020.
“Initially some companies indicated that their earnings guidance could be on the higher end,” said Zazzera. “They have come back to AM Best and said that it looks like results are going to show up more in the low end of their expectations. This is in line with what we have seen across the industry, which is that the impact of COVID-19 has not been as severe as expected.”
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