Tuesday, March 20, 2018

Given the continuing debate in the United States about healthcare policy, from time to time Calcbench likes to review the financial data of large health insurers. We last looked at the data in August 2017. What’s changed since then?

Well, we looked at revenue, operating income, and operating expense for eight larger insurers for both 2016 and 2017. As a whole group, those eight are doing reasonably well: higher revenue, operating income, and operating cash flows; also higher operating expenses, but a much smaller increase than our first three numbers. Take a look.

That said, some specific companies in our population of eight had less stellar numbers. Molina Healthcare, for example, saw its operating income swing from $306 million in 2016 to a $555 million loss in 2017. (No wonder Molina named a new CEO last fall, and picked someone from outside the company.) Aetna’s operating income and operating cash flow both turned negative. Centene had the same issue, but that company was still digesting its 2016 acquisition of Health Net so we might chalk up some of that to integration headaches.

You can see the full breakdown in the following four charts.

Figure 1— revenue.

Figure 2— operating income.

Figure 3— operating cash flows.

Figure 4— operating expenses.

So what does that tell us about healthcare in this country? Well, the Affordable Care Act clearly isn’t bankrupting these eight publicly traded insurers, and that’s one important snapshot of data to consider during our healthcare policy debates.

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