Record Health Insurer Profits May Drive Lower Prices in 2021

Health insurers hit record profits in the second quarter of 2020, which could lead to reduced premiums in 2021, BMO Capital Markets reported Tuesday.

Publicly-traded and non-public insurers fared well, the investment banking firm said. But excess profits “could drive aggressive pricing in 2021 as well as a risk of customer/political backlash,” BMO analyst Matt Borsch wrote in the report.

Unlike many hospitals and doctors, health insurers have done well financially in 2020 because they have fewer claims to pay due to delayed elective hospital procedures during the Covid-19 pandemic. The Affordable Care Act marketplaces are benefiting as ...