The enormous medical response in America to the coronavirus pandemic has not put a drain on US health insurers, which doubled profits in the second quarter of 2020 compared with the same time last year. The US fight against the virus has been marked by overwhelmed hospitals, testing delays and personal protective equipment (PPE) shortages, but the high profits reported by some insurers have underlined concerns about America’s for-profit healthcare model. The country’s largest health insurer, UnitedHealth Group, reported its profits were $6.7bn in the second quarter of 2020 compared with $3.4bn in last year’s. Anthem’s profits rose to $2.3bn from $1.1bn for the same three-month period in 2019. Humana reported last week its earnings rose to $1.8bn, compared with $940m in 2019. Dr Steffie Woolhandler, a longtime advocate of single-payer healthcare and a professor at Cuny Hunter College, said in normal circumstances she considered the billions insurance companies collect a “scandal”. “It is particularly glaring and inappropriate in a pandemic,” said Woolhandler, a co-founder of Physicians for a National Health Program. Last week, the House energy and commerce committee said it was launching an investigation into health and dental insurance companies’ business practices in response to the profits they have reaped during the crisis. There is, however, a simple explanation for the increases. After a short period of uncertainty, it became clear that the cost of providing medical care would be lower in 2020. People were avoiding the doctor’s office and delaying elective surgeries such as knee replacement. Those with mild symptoms of Covid-19 were initially advised to stay home unless they needed urgent care. But the money insurance companies collect each month from individuals, known as premiums, kept pouring in. “Private insurance companies make money by taking in premiums and not paying for care,” Woolhandler said. The drop in spending was a benefit for insurers, but has left already struggling independent doctor’s offices and rural hospitals vulnerable to closures and layoffs. In late July, 20% of clinicians had salaries skipped or deferred over the previous four weeks and 24% reported recent layoffs or furloughs, according to a survey of 523 physicians by the Primary Care Collaborative (PCC) and the Larry A Green Center. “That is not a good system,” Andy Slavitt, a health official in Barack Obama’s administration, tweeted last week. “It’s a system designed for & by insurance companies & pharma companies. Not us. Not doctors and nurses.” A decade ago, insurers would have been able to keep all of the profits. But under the Affordable Care Act, popularly known as Obamacare, profits are capped. For each dollar the insurer collects from small businesses and individuals on premiums, it must spend at least 80 cents on healthcare. For premiums from larger employers, the minimum is 85 cents. The remainder can be kept as profit and spent on administration. Insurers who cross the limit must spend the excess on rebates to consumers within three years. Some insurers have already started sending the checks. The cap does not apply to profits made from insurers’ subsidiary businesses, such as companies which manage pharmacy benefits. This means profits could be even higher than what was reported in earnings calls. The trade group, America’s Health Insurance Plans (AHIP), defended insurers in response to a New York Times story about the profits. AHIP said in a 1,000-word blogpost that the coronavirus response is “a marathon not a sprint”, and suggested costs could be higher for these companies down the line. Linda Blumberg, a fellow at the Urban Institute’s Health Policy Center, said there is uncertainty for insurers, who don’t know yet if there will be a surge in care when people are less worried about coronavirus. Blumberg was part of a research team that surveyed representatives from 25 insurers from April through June for a report by the Urban Institute and Robert Wood Johnson Foundation. Insurers reported concerns about how much a vaccine could cost, how often people would need it and how firms will pay for regular testing. Some representatives also said they had lowered premiums for customers in financial trouble. “The insurers are trying to find ways to help people through this which they are able to do as a consequence of their stronger financial situation at the moment,” Blumberg said. But the eye-watering profits firms reported for the second quarter will certainly add more fuel to calls for a single-payer healthcare program such as Medicare for All. Blumberg said this conversation is part of the historical evolution of the US health insurance system. “We have public insurance for the elderly, for certain segments of the low-income population,” Blumberg said. “There is a very serious conversation going on, which I expect will continue, to introduce a public option.”