[coverage1]

Cigna spoke to its investors specifically about its various books of business with regards to coronavirus and COVID19 for 2020. A significant part of Cigna's business is as an administrator for self-insured companies meaning they don't bear financial risk for specific healthcare costs. This aspect of their business, along with the fact that the expected costs associated with a mild COVID19 outlook for their insurance markets contributed to their optimistic financial outlook over a month ago. This was a view shared by many large plans at the time.

Since the emergence of social policies designed to curb community spread over the past 6-8 weeks, economic conditions for their customers and members have deteriorated. A large percentage of these groups are considering member disenrollment or group termination. Public support of these groups to help ensure healthcare access is a good thing and the AHIP letter that Cigna supports advocates for this position.

As an aside, the social policies currently in place are crushing the business models of hospitals and medical offices. It's devasting financially, but largely seen as temporary until shelter-in-place requirements are lifted. The ensuing economic depression will hurt the majority of business sectors, which in turn will negatively affect health insurers financially later this year and next year.

For the time being, insurers are financially benefitting from lower medical loss, but this will likely be balanced out in the near future as pent-up medical demand returns. The long-term financial future of insurers will depend on how well people can predict COVID19 costs vs. actual utilization.

source: I help manage a community health plan