Search
 

UnitedHealth worried about Medicare cuts

UnitedHealth Group said government cuts to Medicare may make it harder to increase earnings in 2015, sending shares down the most in three months.

By Alex Nussbaum | Updated on January 17, 2014
Jan. 16 (Bloomberg) — UnitedHealth Group Inc., the biggest U.S. health insurer, said government cuts to Medicare may make it harder to increase earnings in 2015, sending shares down the most in three months.   Rate cuts that may reach 7 percent, following a similar reduction for this year, could be “extraordinarily disruptive” to the program, Chief Executive Officer Stephen Hemsley told analysts on a conference call today.   Medicare Advantage, insurers’ private version of the U.S. government program for the elderly, has been a key source of growth for the industry and provided about a fifth of UnitedHealth’s profit last year. The companies’ reimbursements are being scaled back to help pay for the insurance expansion under the Patient Protection and Affordable Care Act, the U.S. health-care overhaul known as Obamacare.

Insurers are facing “unprecedented uncertainty from the ACA implementation and the 2014 Medicare Advantage rate cuts,” said Brian Wright, a New York-based analyst at Monness Crespi Hardt & Co., in an e-mail.

UnitedHealth fell 2.8 percent to $72.76 at the close in New York, its biggest one-day decline since October. WellPoint Inc., the second-largest U.S. insurer, dropped 2.9 percent, Aetna Inc. decreased 1.6 percent and Humana Inc. fell 1 percent.

Complete your profile to continue reading and get FREE access to BenefitsPRO.com, part of your ALM digital membership.

Your access to unlimited BenefitsPRO.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical BenefitsPRO.com information including cutting edge post-reform success strategies, access to educational webcasts and videos, resources from industry leaders, and informative Newsletters.
  • Exclusive discounts on ALM, BenefitsPRO magazine and BenefitsPRO.com events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com

Already have an account?

NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Recommended Stories

BenefitsPRO Broker Expo 2025 (BPRO)Event

The premier educational and networking event for employee benefits brokers and agents.

Get More Information
 

BenefitsPRO

Join BenefitsPRO

Don’t miss crucial news and insights you need to navigate the shifting employee benefits industry. Join BenefitsPRO.com now!

  • Unlimited access to BenefitsPRO.com - your roadmap to thriving in a disrupted environment
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com
  • Exclusive discounts on BenefitsPRO.com and ALM events.

Already have an account? Sign In Now
Join BenefitsPRO

Copyright © 2024 ALM Global, LLC. All Rights Reserved.