As Leading Health Insurers Experience Unprecedented Profits, Underwood, Durbin, Schakowsky, Democratic Members of the Illinois Delegation Urge Insurers to Provide Immediate Financial Relief to Illinois Individuals, Families, and Small Businesses
WASHINGTON— Today, Representative Lauren Underwood (IL-14), Senator Richard J. Durbin (D-IL), Representative Jan Schakowsky (IL-09), and other Democratic members of the Illinois delegation urged Illinois’ leading health insurers to provide financial relief to Illinois individuals, families, and small businesses during the coronavirus pandemic. According to recent reports, the nation’s leading health insurers are experiencing unprecedented profits as enrollees continue to pay premiums while forgoing medical care during the pandemic. At the same time that insurers are enjoying massive profits, the pandemic continues to exact a heavy toll on Illinois communities as workers are laid off and small businesses are forced to close. In the letter, members requested that insurers deliver on their pledges to provide financial assistance by offering maximum premium credits to Illinois enrollees and guaranteeing access to COVID-19 diagnostic testing and treatment with no forms of cost sharing.
“We are writing to urge you to immediately offer desperately needed financial relief to individuals, families, and small businesses throughout Illinois. While families have experienced significant losses in income during the COVID-19 public health emergency, health insurance companies are ‘experiencing an embarrassment of profits,’” the Members of Congress wrote.“Therefore, it is critically important that you use these profits – which have come from premiums Illinois residents have continued to pay while forgoing medical care during the pandemic – to (1) issue maximum premium credits to enrollees of your plans, (2) guarantee access to COVID-19 diagnostic testing and treatment with no forms of cost sharing, and (3) provide other forms of assistance to the fullest extent possible.”
A full letter is below.
In addition to Underwood, Durbin, and Schakowsky, the letter is signed by Representatives Robin L. Kelly (IL-02), Jesús G. “Chuy” García (IL-04), Danny K. Davis (IL-07), and Cheri Bustos (IL-14).
August 31, 2020
Maurice Smith David S. Wichmann
President & Chief Executive Officer Chief Executive Officer
Health Care Service Corporation UnitedHealth Group
300 E. Randolph St. 9900 Bren Road East
Chicago, IL 60601 Minnetonka, MN 55343
Michael Neidorff Bruce D. Broussard
Chairman, President, & Chief Executive Officer President & Chief Executive Officer
Centene Corporation Humana
Centene Plaza 500 West Main Street
7700 Forsyth Boulevard Louisville, Kentucky 40202
St. Louis, MO 63105
Larry J. Merlo Joseph Zubretsky
President & Chief Executive Officer President & Chief Executive Officer
CVS Health One Molina Healthcare, Inc.
CVS Drive 200 Oceangate, Suite 100
Woonsocket, RI 02895 Long Beach, CA 90802
President & Chief Executive Officer
900 Cottage Grove Road
Bloomfield, CT 06002
Dear Mr. Smith, Mr. Wichmann, Mr. Neidorff, Mr. Broussard, Mr. Merlo, Mr. Zubretsky, and Mr. Cordani:
We are writing to urge you to immediately offer desperately needed financial relief to individuals, families, and small businesses throughout Illinois. While families have experienced significant losses in income during the COVID-19 public health emergency, health insurance companies are “experiencing an embarrassment of profits.” Therefore, it is critically important that you use these profits – which have come from premiums Illinois residents have continued to pay while forgoing medical care during the pandemic – to (1) issue maximum premium credits to enrollees of your plans, (2) guarantee access to COVID-19 diagnostic testing and treatment with no forms of cost sharing, and (3) provide other forms of assistance to the fullest extent possible.
Publicly traded health insurance issuers have reported earnings for the second quarter (Q2) of 2020 that have greatly exceeded estimates and historical earnings. For example, UnitedHealth Group had Q2 earnings of $7.12 per share, nearly double their earnings from one year ago ($3.60 per share). Humana’s Q2 earnings were $12.56 per share, more than double their earnings of $6.05 per share in 2019. Although privately traded companies’ earnings are not reported, similar trends likely exist across all insurers.
At the same time that insurers are enjoying massive profits, your enrollees are experiencing serious financial pain. The national unemployment rate, which began the year at 3.6 percent, is now at 10.2 percent, the highest level since 1983. Census survey data found that through mid-July 2020, half of all U.S. adults lived in a household that had lost income since March 2020, and lower-income and minority households have been disproportionately affected. Surveys of small businesses from the National Academies of Sciences found that more than 40 percent of small businesses in the U.S. have been forced to temporarily close due to COVID-19 and three-quarters of firms only had enough cash on hand to last two months.
In recognition of the glaring gap between your growing financial strength and your enrollees’ growing financial challenges, all of you have pledged to help. For example, in reporting Humana’s robust Q2 earnings, President and CEO Bruce D. Broussard affirmed, “As we continue to navigate the global coronavirus pandemic, Humana is committed to ongoing investments in benefits and initiatives designed to improve access to care and ease the financial burden for our members, employer groups and providers. We remain focused on being responsive to our member and patient needs and providing convenient and safe choices of care.”
Similarly, UnitedHealth Group CEO David S. Wichmann pledged that his company remains “committed to taking further actions to address any future imbalances as a result of the pandemic.” These examples are reflective of the broader pledge from the trade association representing America’s health insurance plans, American’s Health Insurance Plans (AHIP). AHIP’s President and CEO, Matt Eyles, has declared that plans are taking “decisive action through concrete, measurable steps to aid Americans and reduce their burdens during this time of need.”
The first way that you could deliver on this promise to your enrollees in Illinois would be to issue premium credits that would provide direct and meaningful relief to individuals, families, and small businesses throughout our state. Such premium credits should be provided separately from and in addition to any forthcoming Medical Loss Ratio (MLR)-associated rebates, as required under the Affordable Care Act. Some plans across the country have started to offer direct financial assistance: for example, on August 5, Blue Cross Blue Shield of Massachusetts announced it would “return $101 million in premium refunds and anticipated rebates to its customers and members as a result of lower than anticipated health care costs during the COVID-19 public health emergency.”
The decision from Blue Cross Blue Shield of Massachusetts to provide more than $100 million to enrollees followed guidance from the Centers for Medicare & Medicaid Services (CMS) on August 4, which gives health insurance issuers in the individual and small group markets the temporary flexibility to offer premium credits for 2020 coverage. As the CMS guidance noted, this flexibility could be critically important for “individuals, families and small employers who may struggle to pay premiums because of illness or loss of incomes or revenue resulting from the COVID-19 public health emergency.” You have both the regulatory authority and the savings needed to help your enrollees: it is imperative that you do so.
In addition to offering premium credits, we urge you to fully comply with COVID-19 testing provisions in the Families First Coronavirus Response Act, which requires individual and group market health plans to provide coverage of COVID-19 tests and related items and services without imposing any cost-sharing requirements, including deductibles, copayments, and coinsurance. The legislation also prohibits prior authorization or other medical management requirements for COVID-19 testing.
Ensuring that costs are not a barrier to getting tested for COVID-19 will be critical to efforts to contain the spread of the virus and to avoid returning to an earlier phase of the Restore Illinois plan. However, despite the federal statutory requirements in the Families First Coronavirus Response Act, there have already been reports of limits and qualifications being imposed on diagnostic testing. Any effort to restrict access to COVID-19 testing for enrollees on your plans is unlawful, unacceptable, and dangerous. We urge all your companies to cover all diagnostic testing for your enrollees in Illinois without cost barriers or other restrictions so that we can continue to safely reopen our state.
Furthermore, we urge you to maintain your commitment to cover COVID-19 treatments at no cost to your enrollees. On August 7, Mr. Eyles wrote, “No one should hesitate to get tested or treated for COVID-19 because of concerns about costs.” In normal times, your companies would be paying out claims for costly elective procedures, routine visits to health care providers’ offices, and other forms of health care utilization that have been delayed or cancelled because of COVID-19. Though you are saving billions from this public health crisis, your enrollees deferring this care continue to pay their premiums.
COVID-19 has exacted a heavy toll on communities throughout Illinois. More than 8,000 Illinoisans have lost their lives from this virus and the not-seasonally-adjusted unemployment rate in Illinois for July 2020 (11.3 percent) is more than 2.5 times higher than the rate in July 2019 (4.2 percent). In the midst of such deep suffering, we share in a common responsibility to meet the needs of our neighbors.
In Congress, we are committed to building on the legislation that we have already passed in response to COVID-19 to provide additional financial support to Illinoisans. Many of our state’s private sector leaders have stepped up as well, including programs to cover telehealth services without cost sharing, assistance for community-based organizations, and other efforts to support the physical, mental, and financial health of individuals, families, and small businesses during this public health emergency. We encourage you to now also step up and share the massive profits you are experiencing from reduced health care utilization during COVID-19 with your enrollees throughout our state.
We look forward to hearing from you as we collectively work to protect lives and livelihoods during this once-in-a-century crisis.