Market

Health-insurance stocks drop after Medicare Advantage proposes lower rates for 2024

A proposal for lower-than-expected Medicare Advantage rates in 2024 has sent shares of publicly traded health insurers falling.

UnitedHealth Group Inc.’s
UNH,
-5.93%

stock fell 1.2% in trading on Thursday, shares of Elevance Health Inc.
ELV,
-4.47%

were down 3.3% and Molina Healthcare Inc.’s
MOH,
-1.93%

stock tumbled 1.6%. Centene Corp.’s
CNC,
-2.94%

stock was down 3.0%, shares of Cigna Corp.
CI,
-3.68%

dropped 2.2% and Humana Inc.’s
HUM,
-4.93%

stock declined 3.3%.

The Centers for Medicare and Medicaid Services on Wednesday proposed new Medicare Advantage rates for 2024, including a core rate increase of 2.09%. Rates have averaged 3.3% over the past five years, according to Oppenheimer analyst Michael Wiederhorn. A final decision is expected April 3.

“While the result is disappointing, the industry has been the beneficiary of some healthy increases in recent years,” Wiederhorn told investors. “Additionally, we note that over the last five years, the final rule has come in 1.0% better than the proposal, on average.”

Mizuho Securities analysts noted that the rate is lower than expected but still view the proposal as positive for managed-care companies.

“While the lower rate [year over year] could impact benefits offered to Medicare beneficiaries, we believe it will allow the industry to continue to grow in the high-single digits,” Mizuho analyst Ann Hynes wrote in an investor note. “While the Biden administration has discussed potential reforms to Medicare Advantage, we do not believe the Biden administration will make major structural changes to the MA program this year.”

The Health Care Select Sector SPDR ETF
XLV,
-1.19%

was also down about 1% in trading on Thursday morning.


Source link

Jake

Jacob Keiter is a husband, a writer, a journalist, a musician, and a business owner. His journey to becoming a writer was one that was paved with challenges, but ultimately led him to find his true calling. Jacob's early years were marked by a strong desire for creative expression. He was always drawn to music, and in his youth, he played in several bands, chasing the elusive promise of fame and success. However, despite his best efforts, Jacob struggled to find the recognition he craved. It wasn't until he hit a low point in his life that Jacob discovered his love for writing. He turned to writing as a form of therapy during a particularly difficult time, and found that it not only helped him to cope with his struggles, but also allowed him to express himself in a way that he had never been able to before. Jacob's writing skills quickly caught the attention of others, and he soon found himself working as a journalist for The Sun out of Hummelstown. From there, he went on to contribute to a variety of publications, including the American Bee Journal and Referee Magazine. Jacob's writing style is reflective of traditional journalism, but he also infuses his work with a unique voice that sets him apart from others in his field. Despite his success as a writer, Jacob also owns another business, JJ Auto & Home, which specializes in cleaning. Jacob's commitment to excellence is evident in all of his endeavors, whether it be in his writing or in his business ventures. Today, Jacob is the author of two books and continues to inspire others through his writing. His journey to becoming a writer serves as a reminder that sometimes our darkest moments can lead us to our greatest achievements.

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *