Becker Private Equity & Business Podcast Summary

Episode: Health Insurers Tank
Host: Scott Becker
Release Date: July 19, 2025

Introduction

In this episode of the Becker Private Equity & Business Podcast, host Scott Becker delves into the recent downturns experienced by major health insurance companies, focusing specifically on Elevance Health and Oscar Health. Becker provides an in-depth analysis of the factors contributing to the rising pressures on these insurers, the implications for the industry, and the broader economic and political landscape impacting their performance.

Rising Pressures on Health Insurers

Becker begins by outlining the increased tensions facing the nation's health insurance companies, attributing these challenges to a combination of political and economic factors. A significant concern highlighted is the rising medical loss ratios (MLR), which directly impact the profitability of these firms.

Scott Becker [01:15]: "What's going on currently is some of the big insurance companies are seeing their medical loss ratios rise. And this, of course, goes right to their profitability."

Elevance Health's Decline

The discussion shifts to Elevance Health, a prominent player formerly known as Anthem Blue Cross. Becker notes that Elevance has become one of the top 20 largest companies in the United States by revenue, underscoring its substantial market presence.

• Stock Performance: On the day of the discussion, Elevance's stock experienced a significant drop of over 12%, contributing to an 18% decline year-to-date.

• Medical Loss Ratio: Elevance currently maintains an MLR of nearly 89%, which is notably higher compared to UnitedHealth Group's 85%.

• Operational Challenges: The high MLR at Elevance is attributed to Medicaid uncertainty and a decrease in total enrollments, putting further strain on the company's financial health.

Scott Becker [02:45]: "Elevance is the latest to get hit with this. On Thursday, their stock dropped more than 12%... Elevance now has a medical loss ratio of nearly 89%."

Oscar Health's Downturn

Becker also examines the recent performance of Oscar Health, another significant entity in the health insurance sector.

• Stock Decline: Oscar Health saw its stock fall by approximately 9.6% on the same day, following a downgrade.

• Leadership: Despite the stock downturn, Oscar Health is led by Mark Bertolini, the former CEO of Aetna, who has been praised for his leadership and strategic direction.

• Year-to-Date Performance: Notwithstanding the recent challenges, Oscar Health remains up year-to-date, indicating resilience despite short-term setbacks.

Scott Becker [04:10]: "Oscar Health also downgraded this week. They fell nearly 9.6%... they've got a brilliant CEO, the former CEO of Aetna, Mark Bertolini... they're still up year to date."

Industry Implications

Becker emphasizes that health insurers have grown significantly, with four of the top 20 companies in the United States by revenue being health insurers: UnitedHealth Group, CVS, Aetna, Cigna, and Elevance. This concentration underscores the vital role these companies play in the broader economy and highlights the potential ripple effects of their financial struggles.

Scott Becker [05:30]: "There are four companies in the top 20 of the health insurers that are the top 20 companies in America by revenues. That's how big the health insurers have become."

Conclusions and Future Outlook

In wrapping up, Becker reflects on the challenges ahead for health insurers, including navigating Medicaid uncertainties and managing medical loss ratios effectively to restore profitability. The episode underscores the delicate balance these companies must maintain between regulatory environments, economic pressures, and maintaining robust enrollment numbers to sustain their market positions.

Scott Becker [06:45]: "Elevance taking it on the chin is their medical loss ratio rises as they find Medicaid uncertainty and their numbers go down in terms of total enrollments."

Notable Quotes

• Scott Becker [01:15]: "What's going on currently is some of the big insurance companies are seeing their medical loss ratios rise. And this, of course, goes right to their profitability."

• Scott Becker [02:45]: "Elevance is the latest to get hit with this. On Thursday, their stock dropped more than 12%... Elevance now has a medical loss ratio of nearly 89%."

• Scott Becker [04:10]: "Oscar Health also downgraded this week. They fell nearly 9.6%... they've got a brilliant CEO, the former CEO of Aetna, Mark Bertolini... they're still up year to date."

• Scott Becker [05:30]: "There are four companies in the top 20 of the health insurers that are the top 20 companies in America by revenues. That's how big the health insurers have become."

• Scott Becker [06:45]: "Elevance taking it on the chin is their medical loss ratio rises as they find Medicaid uncertainty and their numbers go down in terms of total enrollments."

Final Thoughts

Scott Becker concludes the episode by thanking listeners and reiterating the significance of understanding the dynamic challenges facing major health insurers today. The discussion serves as a critical analysis for investors, industry professionals, and stakeholders keen on the future trajectory of the health insurance sector.

Scott Becker [07:30]: "Thank you for listening to the Becker Business podcast and the Becker Private Equity Podcast. Thank you very, very."

This comprehensive summary encapsulates the key discussions and insights shared by Scott Becker regarding the recent performance and challenges faced by major health insurers, providing valuable information for those interested in the intricacies of the private equity and business landscapes within the health insurance industry.