On Wednesday, health insurer stocks experienced a decline following a warning from UnitedHealth Group about higher medical costs. The drop in stocks was attributed to older Americans starting to undergo surgeries and procedures that they had delayed during the Covid-19 pandemic. UnitedHealth, the largest health-care provider in the U.S., saw its shares close around 6% lower. Medicare-focused insurer Humana experienced an 11% decline, while Elevance Health closed roughly 7% lower. CVS Health, which owns insurer Aetna, slid nearly 8%.
In recent years, insurance companies have benefited from the delay in nonurgent procedures due to pandemic-related hospital staffing shortages and the perceived risks associated with entering hospitals during the height of the pandemic. However, UnitedHealth executives indicated on Tuesday that this trend may be reversing. The company reported a significant increase in outpatient care activity, particularly among Medicare enrollees seeking heart procedures and hip and knee replacements at outpatient clinics.
UnitedHealth CEO Timothy Noel noted that older adults covered under Medicare are becoming more comfortable accessing services they had previously postponed. Chief Financial Officer John Rex mentioned that the amount of premium revenue spent on care for the second quarter may exceed expectations due to the surge in procedures.
Conversely, the remarks from UnitedHealth had a positive impact on shares of medical device manufacturers. Medtronic and Stryker saw their shares jump by 2.5% and 4% respectively. Hospital operators such as HCA Healthcare and Tenet Healthcare also experienced slight increases in their stock prices.
| Read More news: Click here |
