UnitedHealth, Humana take hit on low Medicare Advantage payment increase for 2024

zimmytws

• Wednesday's release by the Centers for Medicare & Medicaid Services ("CMS") of Medicare Advantage ("MA") payment rates for 2024 have sent many managed care companies down.
• The hardest hit is UnitedHealth Group (NYSE:UNH), off more than 6%.
• The decline in share prices is due to the proposed annual revenue increase for MA plans -- about 1% higher than in 2023. That's a smaller increase compared to recent years.
• J.P. Morgan's Lisa Gill said that given what the CMS put out is an advance notice, the final rate increase could be higher, as has been done in previous years
• Jefferies' David Windley noted that the increase was in line with expectations.
• Other managed care providers: Humana (NYSE:HUM) -6%; Elevance Health (NYSE:ELV) -5%; Cigna (NYSE:CI) -4%; and Centene (CNC) -3%; and Molina (MOH), -2%.