At the height of the pandemic, the Kaiser Foundation Health Plan more than doubled its net income to $4.5 billion. The managed care plan said the increase was due to reduced expenses and market fluctuations, as the stock market has partially rebounded from its steep decline in March.
For the quarter ending on June 30, Kaiser reported operating revenues of $22.1 billion, up slightly from the $21.4 billion it brought in during the same period last year. The company’s operating expenses, at $20 billion, were flat compared to last year. Its net income, of $4.5 billion, was more than double the second quarter of 2019, when it brought in $2.05 billion.
“Deferred elective surgeries and procedures due to stay-at-home orders across the communities we serve contributed heavily to our second quarter results by temporarily reducing our operating expenses,” CFO Kathy Lancaster said in a news release.
Kaiser’s investments also played a big part in the company’s second quarter results. While the market crash in March left it with a $1.1 billion net loss in the first quarter, it quickly saw its other income rebound to $2.5 billion in Q2.
Last month, Kaiser returned $500 million in CARES Act stimulus funding that its facilities had received. CEO Greg Adams said the company would be “off budget for the year, but we will do fine,” according to the San Francisco Business Times.
Looking to the future, Kaiser will be weighing many of the same questions that for-profit commercial insurers are currently considering. For example: How many of its members will lose their job-based coverage?
Kaiser Permanente currently has a total of 12.4 million members, and as of June 30, more than 900,000 of them were on Medicaid.
With growing unemployment in the communities where it offers its plans, Kaiser said it has “…begun to see a loss in commercial membership as members transition to Medicaid or lose coverage altogether.”
It expects to see these shifts in membership continue through 2021.
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