US health insurer shares fall after UnitedHealth flags Medicaid enrollment issues

US health insurer shares fall after UnitedHealth flags Medicaid enrollment issues

By Amina Niasse

NEW YORK (Reuters) – Shares of U.S. well being insurers fell on Wednesday after UnitedHealth Group cited a near-term disturbance round reimbursement charges for Medicaid as a result of ongoing program-wide enrollment hurdles that started a couple of 12 months in the past.

UnitedHealth shares had been down 4.2% to $482.46, whereas rivals Humana, Centene, and Elevance Well being fell 3.2%, 3.7%, and a pair of.6%, respectively.

“Now we have come by means of this very extended redetermination cycle in Medicaid ensuring that the utilization and charges keep in excellent synchrony,” a UnitedHealth government mentioned on the Bernstein investor convention, including that they anticipate “some disturbance” round it.

Insurers calculate the premium charges they cost primarily based on anticipated enrollment ranges and anticipated medical companies utilization by members.

A COVID-19 pandemic coverage required states to take care of enrollment for folks coated by authorities Medicaid applications for these with low earnings. That coverage, which started in March of 2020, was terminated in April 2023, prompting every state to reassess who was eligible for protection.

KFF, previously the Kaiser Household Basis, estimated that as of Might 23, 22 million folks had been disenrolled from Medicaid and the CHIP insurance coverage program for youngsters, and that 22 million renewals had been nonetheless underway. About 49 million had their protection renewed.

“Traders have already been grappling with the mismatch between charges and prices in Medicare Benefit over the previous 12 months, and it now looks like this dynamic may additionally now be manifesting extra prominently on the Medicaid aspect of the home, too,” Stephens analyst Scott Fidel wrote in a observe.

Along with Medicaid plans for folks with low earnings, UnitedHealth and different insurers handle well being plans for the U.S. Medicare program for folks aged 65 and older or with disabilities.

The insurers had been shocked in late 2023 and early 2024 by elevated healthcare use inside these plans.

(Reporting by Amina Niasse in New York; Extra reporting by Mariam Sunny in Bengaluru; Modifying by Invoice Berkrot)

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