Two Jolts in 3 Days Caught Health Insurance Investors Off-Guard
From Bloomberg, In Print — Oct 17th, 2024
The largest U.S. health insurers shocked investors with forecast cuts that wiped $55 billion from their combined market value in just three days. Elevance Health’s adjusted earnings are expected to be flat in 2025, following a disappointing outlook from UnitedHealth Group, marking the largest intraday drops for both since March 2020.
Rising Medicaid costs and federal payment pressures are weighing on insurers that rely heavily on government programs covering more than one in three Americans. “Insurers face significant challenges navigating the intersection of federal programs and rising costs,” said Henrietta Treyz, director of economic policy at Veda Partners. Spencer Perlman, also from Veda Partners, added that management showed “an almost shocking lack of transparency” regarding the fast-rising Medicaid expenses.
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