Reduced spending, utilization drove health insurers' 2020 profits
The pandemic’s effect on health spending and insurer financial performance in 2021 remains uncertain.
Gross margins among fully insured group market plans remained relatively flat in 2020 when compared to 2018. (Photo: iStock)
Health insurers remained profitable across markets in 2020 because of an unprecedented decrease in health spending and utilization caused by the pandemic.
Hospitals, physicians and other health care providers canceled elective procedures to free up beds, staff and supplies early in the pandemic and to limit unnecessary exposure and risk of infection. Patients also opted to forgo non-urgent care to limit risks and exposure to the virus. Although spending rebounded through the second half of the year, it was somewhat lower in 2020 than it had been in 2019, making last year the first time in recorded history that health
spending dropped in the United States.
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