By Emily Dattilo
Stocks of health insurers including Humana and Alignment Healthcare were falling on the heels of a report from Leerink Partners analysts led by Whit Mayo, who got an early look at unpublished so-called cut points that drive performance for healthcare plans' Star ratings.
The ratings, which are assigned and published by the Centers for Medicare and Medicaid Services, affect insurers' eligibility for quality bonuses. "62% of the cut points moved higher which if plans don't see similar movement higher in their performance could elevate the risk that Star ratings could decline," Mayo wrote on Monday.
He believes that Elevance Health likely faces the least risk, with Alignment Healthcare, Humana, CVS, and UnitedHealth Group "looking most at risk perhaps in that order."
CMS and Alignment didn't have immediate comments. United Health, Humana, and CVS didn't immediately respond to requests for comment.
"Many companies have large contracts that currently close on certain cut points that could elevate risk," he wrote. "As an example, ALHC [Alignment] has approximately 90% of its members in one contract that currently sits close to the 4.0 Star breakpoints to retain that designation."
Humana stock was down 4% to $343.69 in afternoon trading. It was the worst performer in the S&P 500.
Other health-insurance stocks were mixed. Elevance gained 0.7%, Alignment dropped 5.5%, CVS slid 2.1%, and UnitedHealth fell 0.7%.
Write to Emily Dattilo at emily.dattilo@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
September 09, 2024 14:50 ET (18:50 GMT)
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