Will Flu Season Impact Insurer Costs?
Flu season typically costs the U.S. economy close to $10.5 billion in lost productivity and direct medical expenses, according to 2007 study by the Centers for Disease control (CDC). With the nation in the midst of the strongest flu season in nearly a decade, costs this winter could top those numbers.
In its most recent weekly update, the CDC reported 47 states with widespread elevated flu levels in the week ended January 5th. Confirmed flu-related hospitalizations at facilities in 15 states monitored by researchers surged to epidemic levels, at a total of 3710 for the season since October 1st.
UnitedHealth Group will be the first of the major health insurers to report earnings, when it posts its fourth quarter results on Thursday.
The insurer is expected to earn $1.19 per share on revenues of $2.82 billion. Investors will be watching to see how the flu is impacting medical costs.
(Read More: Nasty Flu Season Sparks Spotty Vaccine Shortages)
High medical costs during the 2009-2010 Swine Flu pandemic had a big impact on health insurers' earnings. The outbreak saw nearly 7000 hospitalizations in the U.S. alone.
At this point, Aetna executives don't believe the current trends point to an extraordinary season like 2009.
At the JP Morgan Healthcare conference, Aetna CEO Mark Bertolini told investors the insurer is budgeting for a $40-$50 million for this year's flu season. Even at its worst, he does not see costs getting close to the $100 million spent in 2009 epidemic.
(Read More: Strong Flu Could Boost Some Health Care Profits)
"The general consensus is that while the number of cases this year has increased significantly, the intensity of this flu season is a lot lower than in years past," explained Citi analyst Carl McDonald in a note to clients, "so the cases aren't costing as much."
In a sign the spread of influenza may be easing in some areas, the percentage of people visiting doctors for influenza-like illness (ILI) dropped nationally to 4.3 percent from 6 percent in the week ended January 5th, according to the CDC. By comparison, during the moderately severe flu season in 2003-2004, the ILI rate peaked at around 7.6 percent, and at the same rate during the 2009 Swine Flu outbreak.
Nationally, flu season typically peaks in February or March.
—By Bertha Coombs; Follow her on Twitter: