Stock Performance

Here’s how major health insurers’ stock performed in February 2023. UnitedHealth Group had the highest closing stock price among major commercial insurers as of February 28, 2023, at $475.94. Humana Inc. had the highest closing stock price among major Medicare insurers at $495.02.

Government-funded health plans have become highly profitable for the country’s largest insurers as Medicaid rolls have swelled and as more and more seniors choose Medicare Advantage plans. Yet analysts say changes are coming that may partially even the playing field between smaller health plans and industry heavyweights, which command the bulk of government business.
A new report from the insurance-focused credit rating firm A.M. Best — titled “US Health Insurers Prepare for Shift Driven by End of Government Mandates” — stated that health plans overall “have reported good top-line growth over the last two years, with premium revenues up 8.2% in 2021 and 10.9% through the third quarter of 2022.”

Here’s how major health insurers’ stock performed in January 2023. Elevance Health had the highest closing stock price among major commercial insurers as of January 31, 2023, at $499.99. Humana Inc. had the highest closing stock price among major Medicare insurers at $511.70.

Although health insurance trade groups slammed a final rule that will cause the government to claw back billions of dollars’ worth of overpayments to Medicare Advantage organizations (MAOs), some equities analysts pointed out that the regulation was not as bad as it could have been. What remains unclear, however, is whether the industry will challenge the rule in court.

“Our high-level takeaway is that, while some components of the rule run counter to the industry’s requirements, the absolute impact that CMS is forecasting is manageable within the context of a program that will soon approach $400 [billion],” Credit Suisse’s A.J. Rice advised investors. In fact, CMS estimates that payment clawbacks under the rule will amount to $4.7 billion through 2032, or $470 million annually over 10 years, he noted. “This would represent roughly 0.1% of annual program spend.”

Elevance Health, Inc. on Jan. 25 reported adjusted earnings per share (EPS) of $29.07 in 2022, representing a 12% increase from 2021. Gail Boudreaux, the company’s president and CEO, told analysts on a conference call that it was the fifth consecutive year in which Elevance’s adjusted EPS had hit or exceeded its 12% to 15% annual target increase. That came as the insurer, which was known as Anthem, Inc. until last year, ended the year with more than 47.5 million medical members, up nearly 2.2 million from the end of 2021.

David Windley, a Jefferies analyst, wrote in a note to investors on Jan. 25 that Elevance’s fourth quarter “was solid (maybe not exceptional),” citing the company’s 89.4% medical loss ratio (MLR) and adjusted EPS of $5.23, which beat the Wall Street consensus estimate of 90.1% and $5.19, respectively. Windley noted that Elevance “still has a long way to go” with improving its full-year 5.4% operating margin, although he noted the 3.4% fourth-quarter operating margin was a 10 basis-point improvement from the fourth quarter of 2021.

During the J.P. Morgan Healthcare Conference on Jan. 11, chief executives of Bright Health Group, Inc., Clover Health Investments Corp. and Oscar Health, Inc. discussed their companies’ aims to achieve profitability this year or next year. Thus far, however, the companies have not had a profitable quarter since they went public in 2021.

For the first three quarters of 2022, the companies collectively had a net loss of more than $1.3 billion: Bright Health lost $691.3 million, Clover Health lost $254.8 million and Oscar Health lost $383 million.

Here’s how major health insurers’ stock performed in December 2022. UnitedHealth Group had the highest closing stock price among major commercial insurers as of December 30, 2022, at $530.18. Humana Inc. had the highest closing stock price among major Medicare insurers at $512.19.

Here’s how major health insurers’ stock performed in November 2022. UnitedHealth Group had the highest closing stock price among major commercial insurers as of November 30, 2022, at $547.76. Humana Inc. had the highest closing stock price among major Medicare insurers at $549.90.

In AIS Health’s annual roundup of health insurer executive compensation data, four newly public startup insurers stand out because their CEOs’ total compensation in 2021 easily outstrips that of chief executives at major firms like UnitedHealth Group and Cigna Corp. However, experts tell AIS Health that the startups’ filings with federal regulators paint an unintentionally deceiving picture, as the CEOs of those not-yet-profitable firms are highly unlikely to collect hundreds of millions of dollars’ worth of stock awards listed there.

“They’re never going to realize, in one year, that much compensation,” says Ari Gottlieb, a principal at A2 Strategy Group who has been closely tracking the performance of the four startup insurers that went public in 2021: Alignment Healthcare, Inc., Bright Health Group, Inc., Clover Health Investments Corp. and Oscar Health, Inc.

See a full list of director compensation for top health insurers at https://bit.ly/3gR963N, compiled by AIS Health.

N/A = Not Available.

Compensation data for Jared Short includes payments allocated to Regence insurance operations in Washington state, Oregon and Utah but not Idaho.

SOURCE/METHODOLOGY: All data is compiled from individual health insurance companies, state insurance department documents and U.S. Securities and Exchange Commission filings.

Health plans selected based on commercial medical risk enrollment as of the beginning of 2022, per AIS’s Directory of Health Plans. All publicly traded companies are included except Aetna, which was acquired by CVS Health Corp. in 2018.