UNITEDHELTH guidelines may mean a problem for more insurance companies

UNITEDHELHELTH Group20 % shares sank on Thursday after the company She reduced her annual profit expectationsQuoting the higher medical costs, it is expected in its medical care plans.

These dark results from the healthcare giant that are seen as Belweether in the insurance industry can be a warning sign for other companies called Medicare Advantage plans, according to some Wall Street analysts. It comes after the disturbed 2024 of the health insurance companies, and it is harmed by the low government payments, the high medical costs and the reaction and the reverse reaction yet. killing One of the best executive director of UNITEDHEALTHCARE, Brian Thompson.

UNITEDHEALTHCARE, the UNITEDHEALTH group, is the largest provider in the country for these plans. The opponent’s shares Humana 5 % decreased, while Height health More than 1 % decrease and CVS 2 % fell. Cigna It does not have a Medicare feature. Its stock increased about 1 % on Thursday.

Ryan Langeston, TD Cowen analyst, said in a memorandum on Thursday that the results of the first quarter of United Health reveal “fateful signs” to accelerate medical costs in Medicare Advantage companies. He added that the company “predicted properly” increased medical costs again in 2023, so it will question Thursday’s comments “in full expectations for each insurance company.

The higher medical costs have led to the strengthening of the entire insurance industry over the past year, as a greater number of elderly people return to hospitals for undergoing procedures that were delayed during the Covid-19 pandemic, such as alternatives to the joint and hip. But the case was not of great importance in UNITEDHEALTHCARE.

Barclays Andrew Mok analyst said that United Holth’s problems may be less than a case for companies that have made “important” outlets from some of the Medicare feature, including Humana and CVS, according to a note on Thursday. Many insurance companies last year The uninterrupted Medicare feature came out Because of the high medical costs and the reduction of payment rates from the federal government.

Meanwhile, the issue may be a greater deal for companies that have gained a greater market share in the Medicare feature, such as Heafance Health and Alignment of healthAccording to Mock.

UNITEDHELTH said that the high use of care, or use, in Medicare Advantage, came much higher than what the company planned for this year, which was to increase the care activity at a rate consistent with what it witnessed in 2024. But the trends that became clear at the end of the first quarter indicate that the care activity increased “at this level”, and the executive director of the UNITEDHEALTH Group,, And Rew Witty said during their profits.

He added that the jump was especially noticeable in the services of doctors and external patients, which do not include staying in the hospital overnight.

“It is very unusual”, “Lance Wilkes, prominent stock analyst at Bernstein, He said CNBC’s “Squawk Box” on Thursday. He said that the increasing use is “really sudden”, which starts from the high care activity that the industry witnessed during the past year.

Wilkes added that UNITEDHELHE and the broader industry may be the “retreat” of the “intensity of some activity they do to manage use”, which causes dissatisfaction among patients. For example, some insurance companies require in advance, which causes service providers to obtain approval from the patient’s insurance company before managing specific treatments.

“I think that United is likely to decline due to the opposite winds of politics and audit in the company,” Wilkes said. “I think the terrible thing that happened to Bian Thompson and the company is part of this, and I think it also reflects the audit of the Ministry of Justice on United over the past two years.”

According to the united High Government investigation One of the practices of Medicare.

Also on Thursday, UNITEDHELHE referred to issues related to changes in the form of patients treated under the OPTUM health unit. This sector includes the director of pharmaceutical benefits, which negotiates drugs with manufacturers on behalf of insurance companies and maintains gum, among other responsibilities.

However, Wyte said that the company is taking measures to improve results and study problems related to OPTUM and high medical costs “largely tackled with our expectation until 2026”.

If there is nothing else, insurance companies are appointed to get a boost next year. The Trump administration said in April it will achieve it A significant increase in payment rates For Medicare Advantage, long distances are a previous suggestion from the Biden administration.