Medicaid, MA headwinds pressure payers in Q2. Here's a look at how major companies fared

By Paige Minemyer / August 9, 2024

Medicare Advantage (MA) and Medicaid woes continued to plague some major payers in the second quarter, with UnitedHealth Group regaining its crown as the most profitable company in the industry for the second quarter.

However, the healthcare giant lagged behind rival Elevance Health through the first half of 2024, according to a review of company earnings reports conducted by Fierce Healthcare. Through the first six months of the year, UHG has posted $2.8 billion in profit, dragged by the financial effects of the massive cyberattack that hit its Change Healthcare unit in the first quarter.

Elevance Health reported $4.5 billion in profit through the first two quarters. In the second quarter, UHG reported $4.2 billion in profit while Elevance posted $2.3 billion.

UnitedHealth had an elevated medical loss ratio in the quarter, but executives attributed that in large part to the continued impacts of the cyberattack, as they saw a notable difference in coding intensity once the company rolled back waivers it instituted following the hack.

In addition, Medicare funding cuts played a role in the raised medical loss ratio, UHG leaders said on the company's earnings call.

UnitedHealth expects the financial impacts of the cyberattack to land between $2.3 billion and $2.45 billion. Revenues at UHG were $98.85 billion in the second quarter and $198.65 billion through the first six months of the year, by far the highest among the six national payers.

Elevance Health, meanwhile, had the fourth-highest revenue among the six companies in the second quarter, posting $43.9 billion. It reported $86.5 billion in revenue through the midpoint of 2024, according to its earnings report.

Executives noted that the insurer was facing membership declines in the second quarter it attributed to the Medicaid unwinding. CEO Gail Boudreaux said the company is expecting some of those who were removed from the rolls to reenroll with Elevance Health later this year.

Centene also felt pressure around Medicaid redeterminations in the second quarter, according to its top brass. The company reported a 87.6% medical loss ratio in the second quarter, which it said was likely driven by the unwinding. Enrollment changes led to higher acuity among members.

Executives said it's working to match its rates to adjust for this higher acuity as the redeterminations complete.

Centene had the fifth-highest revenue and profit in the second quarter, reporting $39.8 billion and $1.15 billion, respectively. Midyear profits were $2.3 billion, and revenues were $80.2 billion.

While Medicaid posed a major challenge to Elevance and Centene, CVS Health and Humana instead felt the sting of pressures related to MA. Humana has had a rough series of quarters following MA rate cuts and elevated utilization among seniors.

Humana Chief Financial Officer Susan Diamond said the insurer is likely to lose "a few hundred thousand" members as it makes adjustments to benefits and exits certain markets in response to the headwinds in MA.

The company reported $29.5 billion in revenue for the second quarter as well as $679 million in profit, both the lowest figures in our analysis. In the first half of 2024, it posted $51.1 billion in revenue and $1.4 billion in profit.

CVS Health CEO Karen Lynch announced on its second-quarter call that she would take over direct control of the company's Aetna division as the insurer continues to struggle. The medical loss ratio at Aetna was 90% through the first half of the year, driven by its MA star ratings performance and Medicaid challenges.

CVS brought in $91.2 billion in revenue and $1.8 billion in profit for the second quarter. It also posted midyear profit of $2.9 billion and midyear revenue of $179.7 billion, the second highest among the six insurers.

The Cigna Group posted $60.5 billion in revenue and $1.5 billion in profit for the second quarter, according to its earnings report. The insurer has less exposure to the MA market and has been less affected by the ongoing struggles there, posting a medical loss ratio of 82.3%.

At the midpoint of 2024, Cigna posted $117.8 billion in revenue and $1.3 billion in profit.