Stock Performance

Some Insurtech, Blues CEOs Log High Pay as Executive Comp Changes Loom

In the latest round of health insurer executive compensation data collected by AIS Health, there were once again intriguing stories to tell — such as why an insurtech CEO appeared to outearn the heads of the industry’s largest insurers, or what led a Blue Cross Blue Shield affiliate to nearly double its CEO’s compensation year over year.

However, finance experts who spoke to AIS Health, a division of MMIT, say that the biggest story might just be a recent court decision involving none other than Tesla, Inc. CEO Elon Musk, as the ruling could influence how all types of companies — including health insurers — determine their chief executives’ compensation going forward.

0 Comments
© 2024 MMIT

MCO Stock Performance, January 2024

Here’s how major health insurers’ stock performed in January 2024. UnitedHealth Group had the highest closing stock price among major commercial insurers as of Jan. 31, 2024, at $511.74. Humana Inc. had the highest closing stock price among major Medicare insurers at $378.06.

0 Comments
© 2024 MMIT

Humana’s Slashed Earnings Outlook Stuns Analysts

Although a recent Humana Inc. regulatory filing had already prepared the market for a lackluster fourth-quarter earnings report, Wall Street analysts appeared to be shellshocked on Jan. 25, when the Medicare Advantage-focused insurer detailed just how much of a financial hit it expects to take from an unanticipated care utilization surge.

“Worst case scenario plays out,” Justin Lake of Wolfe Research wrote in a note to investors published shortly after Humana released its financial results — which included a newly revised 2024 adjusted earnings per share (EPS) outlook of “approximately $16.”

0 Comments
© 2024 MMIT

In Strong Fourth Quarter, Elevance Avoids Utilization Spike

Elevance Health, Inc. reported stronger results for its 2023 fourth quarter earnings than its other publicly traded managed care peers so far, driven by relatively low utilization across its diverse mix of business lines. The results received positive reviews from Wall Street analysts, who contrasted the strong results with other carriers’ struggles.

Elevance, the for-profit Blue Cross and Blue Shield affiliate formerly known as Anthem, experienced lower care utilization than other managed care heavyweights like UnitedHealth Group and Humana Inc. — something that analysts were quick to note in their coverage of Elevance’s results. Elevance has substantive business in commercial insurance, Medicare and Medicaid.

0 Comments
© 2024 MMIT

Utilization Angst Gives Humana, UnitedHealth a Tough Start to 2024

If the market reactions to a Humana Inc. regulatory filing and to UnitedHealth Group’s latest earnings report are any indication, concerns about elevated care utilization that cropped up in the second half of 2023 have followed health insurers into the new year.

While Humana had already expected that heightened medical care use among its senior enrollees would continue through the rest of 2023, “actual fourth quarter results reflect an additional increase in Medicare Advantage medical cost trends,” the company said in a Jan. 18 filing with the Securities and Exchange Commission.

0 Comments
© 2024 MMIT

Insurtechs Speaking at J.P. Morgan Expect to End 2024 in the Black

Three startup “insurtechs” — Oscar Health Inc., Clover Health Investments Corp. and Alignment Healthcare Inc. — presented at the J.P. Morgan Health Care Conference in San Francisco last week, where they reiterated earlier projections that they expect to close 2024 in the black. Oscar and Clover expect to turn a profit in 2024, while Alignment says it will break even.

Oscar reiterated its promise to be profitable in 2024, and it teased entry into the Individual Coverage Health Reimbursement Arrangement (ICHRA) market. ICHRAs, which allow participating employers to reimburse employees for Affordable Care Act marketplace coverage at a fixed rate in lieu of purchasing a traditional group health plan, have also been identified as a target market by Centene Corp. in recent weeks.

0 Comments
© 2024 MMIT

MCO Stock Performance, December 2023

Here’s how major health insurers’ stock performed in December 2023. UnitedHealth Group had the highest closing stock price among major commercial insurers as of December 29, 2023, at $526.47. Humana Inc. had the highest closing stock price among major Medicare insurers at $457.81.

0 Comments
© 2024 MMIT

Centene Bets Big on ICHRAs at Investor Day

During their Dec. 12 investor day, Centene Corp. executives promised 12% to 15% in annual earnings growth and declared victory in their multiyear value creation and cost-cutting plan. Wall Street analysts responded warmly to the firm’s presentation, which featured a bold plan to grow Affordable Care Act marketplace enrollment by courting small businesses.

That plan would leverage Individual Coverage Health Reimbursement Arrangements (ICHRAs) to exploit what CEO Sarah London called a “long-term disruption opportunity” in the small-business health insurance market. Centene is the first major carrier to promise long-term, substantive growth in ICHRAs. The long-term growth prospects of ICHRAs, which allow employers and employees to buy marketplace plans, are far from clear.

0 Comments
© 2024 MMIT

MCO Stock Performance, November 2023

Here’s how major health insurers’ stock performed in November 2023. UnitedHealth Group had the highest closing stock price among major commercial insurers as of November 30, 2023, at $552.97. Humana Inc. had the highest closing stock price among major Medicare insurers at $484.86.

0 Comments
© 2024 MMIT

The Next Big Deal? Rumored Cigna-Humana Talks Raise PBM Overlap Question

The Cigna Group is reportedly discussing a multibillion-dollar deal with Humana Inc. that would create a diversified health insurance giant capable of going toe-to-toe with UnitedHealth Group and CVS Health Corp.

Industry observers agree that such a transaction would receive robust regulatory scrutiny — with many predicting a high likelihood that federal officials will lob a legal challenge. However, opinions vary about how much the companies’ respective PBM businesses present a major antitrust risk.

News of the potential deal came from a Nov. 29 Wall Street Journal article, which cited people familiar with the matter speaking on condition of anonymity. Assuming the talks don’t fall apart, the terms of the deal could be finalized by the end of the year, the article stated.

0 Comments
© 2024 MMIT