Stock Performance

MCO Stock Performance, August 2022

Here’s how major health insurers’ stock performed in August 2022. UnitedHealth Group had the highest closing stock price among major commercial insurers as of August 31, 2022, at $519.33. Humana Inc. had the highest closing stock price among major Medicare insurers at $481.78.


News Briefs: Medicare Negotiation Will Cost Pharma Manufacturers

Moody’s on Aug. 19 released a report “stating that the drug pricing provisions in the Inflation Reduction Act of 2022 are credit negative for the pharmaceuticals industry, as the savings to the federal government and consumers will generally be borne by the industry,” the credit rating firm said. The most substantial impact on drug manufacturers will come from the IRA’s Medicare provisions, which the report observes are “estimated to save the US government $102 billion over 10 years. This cost will fall largely to the industry, as will the price curbing provisions and the reduction in the beneficiary out-of-pocket costs.” Moody’s also expects pharma’s early-stage transaction trend to accelerate: “One implication of the Inflation Reduction Act will be an increase in industry-wide acquisitions, as companies will seek ways to improve longer-term growth rates, given pressure on earnings growth that will result from the legislation. By acquiring companies with promising pipeline-stage products, pharmaceutical companies can increase the number of future drug launches to drive higher earnings.”

MCO Stock Performance, July 2022

Here’s how major health insurers’ stock performed in July 2022. UnitedHealth Group had the highest closing stock price among major commercial insurers as of July 29, 2022, at $542.34. Humana Inc. had the highest closing stock price among major Medicare insurers at $482.00.


Centene Reports Progress in Value Creation Plan, Despite Headwinds

Despite facing several headwinds over the next year, including anticipated deterioration in Medicare Advantage star ratings and falling Medicaid enrollment, Centene Corp. increased its full-year 2022 earnings projections and unveiled the latest steps in its ongoing value creation plan.

The moves pleased investors, who drove Centene shares to a 52-week high, closing at $93.15 on July 26, the day financial results were posted.

Centene posted second-quarter 2022 adjusted earnings per share (EPS) of $1.77 on revenues of $35.9 billion, besting analysts’ estimate of $1.69. Adjustments included a charge of $1.45 billion related to real-estate divestitures, with $744 million for leased space and $706 million for owned real estate assets. Including the charge and other adjustments, Centene reported a second-quarter 2022 loss of $129 million, or 29 cents per share.


Boosted by Low Utilization, Humana Posts Robust Earnings for Second Quarter of 2022

Humana Inc. delivered robust financial results in the second quarter of 2020, with earnings far outstripping the Wall Street consensus. The Medicare Advantage-focused insurer credited lower-than-expected utilization for the strong result, provided investors with more detail about its plans to reorganize following several notable provider transactions, and touted plans to expand its Medicaid business.

Humana took in more than $23.7 billion in adjusted earnings in the second quarter, generating $959 million in adjusted cash flow and adjusted earnings per share of $8.67, beating the Street’s estimate by about $1.00 per share. The firm’s medical loss ratio (MLR) for the quarter was 85.8%. Executives raised the company’s end-of-year earnings projection by $0.25, a move that Oppenheimer & Co. analyst Michael Wiederhorn said “reflect[s] some conservatism” in a July 27 note to investors.


Elevance Delivers Robust Enrollment, Revenue Growth in Second Quarter

Elevance Health Inc. (formerly known as Anthem, Inc.) posted strong results for the second quarter of 2022, raising its end-of-year earnings projection and earning praise from Wall Street. However, the company’s strong results — which were driven by high profitability in Medicare, Medicaid and PBM earnings — could be less robust in the third quarter, executives said, with COVID-19 surging once again due to the BA.5 variant.

The insurer reported adjusted earnings per share (EPS) of $0.29, which beat the Wall Street consensus of approximately $0.28 by 4%, according to Evercore ISI analyst Michael Newshel. According to an Elevance press release, revenue grew by 15.6% year over year to reach $38.5 billion, while profits grew by 13.7% year over year to nearly $2.4 billion. Enrollment reached 47.1 million members, up 2.7 million or 6.1% year over year. The medical loss ratio (MLR) companywide was 87%.


UnitedHealth Plans on Eliminating Out-Of-Pocket Costs for Some Drugs, Raises Financial Guidance

Starting as early as next year, UnitedHealth Group expects to have no co-pays or out-of-pocket costs for members in its UnitedHealthcare division’s standard fully insured group plans who take several medications, including insulins. The managed care organization made the announcement on July 15, coinciding with the release of the company’s second quarter financial results that beat Wall Street analyst expectations.

UnitedHealth increased its adjusted net earnings per share (EPS) guidance for the year to $21.40 to $21.90, up from its previous guidance of $21.20 to $21.70 issued during its first quarter earnings call in April.


MCO Stock Performance, June 2022

Here’s how major health insurers’ stock performed in June 2022. UnitedHealth Group had the highest closing stock price among major commercial insurers as of June 30, 2022, at $513.63. Molina Healthcare, Inc. had the highest closing stock price among major Medicaid insurers at $279.61.


Centene Plans to Significantly Reduce Office Space; Other Insurers Likely to Follow

Centene Corp. revealed during its June 17 investor day that it plans to reduce by 65% the amount of office space it leases across the United States as a way to cut costs and appease employees who prefer working from home. Like many large employers, other health insurers have followed suit — or are considering doing so — as they adjust to an office environment that looks much different than was standard before COVID-19.

Several major insurance companies declined to discuss their office leasing plans when contacted this week by AIS Health, a division of MMIT. But most, if not all, are actively evaluating their real estate footprints, according to Dan Mendelson, the CEO of Morgan Health, JPMorgan Chase Co.’s health care arm.


Centene Raises Full-Year 2022 Financial Guidance, Cites Redetermination Delay as Major Reason

During its investor update on June 17, Centene Corp. announced it had increased its adjusted diluted full-year earnings per share (EPS) guidance to between $5.55 and $5.70, up from its April range of between $5.40 and $5.55. The health insurance company also raised its projected annual premium and service revenues by $2 billion to between $134.3 billion and $136.3 billion.

Centene’s executives attributed much of the increase to its better-than-expected performance, particularly in the health insurance exchange market, as well as the delay in the restart of Medicaid eligibility redeterminations.