trending Market Intelligence /marketintelligence/en/news-insights/trending/umzspQ9otEz3iEJOqzbQaA2 content
Log in to other products

Login to Market Intelligence Platform


Looking for more?

Contact Us

Request a Demo

You're one step closer to unlocking our suite of comprehensive and robust tools.

Fill out the form so we can connect you to the right person.

If your company has a current subscription with S&P Global Market Intelligence, you can register as a new user for access to the platform(s) covered by your license at Market Intelligence platform or S&P Capital IQ.

  • First Name*
  • Last Name*
  • Business Email *
  • Phone *
  • Company Name *
  • City *
  • We generated a verification code for you

  • Enter verification Code here*

* Required

Thank you for your interest in S&P Global Market Intelligence! We noticed you've identified yourself as a student. Through existing partnerships with academic institutions around the globe, it's likely you already have access to our resources. Please contact your professors, library, or administrative staff to receive your student login.

At this time we are unable to offer free trials or product demonstrations directly to students. If you discover that our solutions are not available to you, we encourage you to advocate at your university for a best-in-class learning experience that will help you long after you've completed your degree. We apologize for any inconvenience this may cause.

In This List

Stable cost trends, growing membership may lead to solid Q3 for health insurers

Infrastructure Issues: Tools to Dig Deep on Potential Risks

Part Two IFRS 9 Blog Series: The Need to Upgrade Analytical Tools

2018 US Property Casualty Insurance Market Report


Fintech Funding Flows To Insurtech In February

Stable cost trends, growing membership may lead to solid Q3 for health insurers

Political uncertainty could become a headwind for the health insurance industry in 2020, but the shorter-term financial outlook appears to be more tranquil.

A majority of the largest managed care companies are expected to report year-over-year improvements in revenues and earnings when they release third-quarter financial results. Revenue for eight of the top 10 public U.S. managed care insurers is expected to be up year over year, while six of 10 should see increases in EPS, according to an S&P Global Market Intelligence examination of sell-side analyst forecasts.

Molina Healthcare Inc. and Magellan Health Inc. are the only companies in the sector that are projected to see both earnings and revenues slide compared to the third quarter of 2018.

SNL Image

Stephens analyst Scott Fidel said stable cost trends in the commercial market will be among the topics of conversation on earnings calls, as will Medicare Advantage, which has had favorable trends in both growth and margin. How the Medicare Advantage landscape could look in 2020 could produce some interesting commentary, according to Fidel.

"We'll be very focused on how the companies talk about pricing for Medicare Advantage and competition for next year, considering the CMS landscape data did show a very competitive pricing outlook for the industry for 2020," the analyst said in an interview.

Overall, the managed care industry's outlook for the next 12 months is positive, according to CFRA Research analyst Colin Scarola.

"We think the largest drivers of earnings growth will be cheaper generic drugs and vertical integration helping to contain medical costs, as well as rising health plan membership and improved pricing driven by a healthy U.S. economy," Scarola said in an email.

While both top-line and EPS growth at managed care companies will be favorable compared to the broader market, there will be "heavy scrutiny" of medical loss ratios, Fidel said. The impending return of the Affordable Care Act's Health Insurance Providers Fee and healthcare-related headlines spurred by the upcoming presidential election may also weigh on the sector.

"There's a strong, strong relative growth outlook for these companies, but they also face some headwinds, especially around the [health insurance fee]," Fidel said. "It's a period of uncertainty as stocks ... pause, sort of waiting to get more clarity on who the [presidential] candidates are going to be for 2020."

Because of that uncertainty, Fidel in an Oct. 4 note said Stephens had "tempered" its 2020 estimates.

The analyst expects a conservative approach when it comes to any political commentary in light of the negative stock reaction to UnitedHealth Group Inc. CEO David Wichmann's strong rebuttal to calls for "Medicare for All" during a first-quarter conference call.

"That was clearly a signal that investors probably prefer that the managed care managers remain highly diplomatic in their commentary on the conference calls as relates to the broader political dynamic," Fidel said.