Top Movers | Health Insurer Stocks Plunge as UNH Warns of Rising Costs and Surgeries
Health Insurer Stocks $UnitedHealth(UNH)$ , $CVS Health(CVS)$ and $Humana(HUM)$ shares were falling -6.4%, -7.76% and -13.9%, respectively.
The declines for each of the health insurance stocks stemmed from comments made by an executive of rival UnitedHealth Group at the Goldman Sachs Global Healthcare Conference.
UnitedHealth Group announced that
its costs were increasing as a result of a rise in surgeries among older adults.
This suggests that the company's expenses related to healthcare services are growing, impacting its profitability and financial performance.
Additionally, the news of UnitedHealth Group's rising costs and the increase in surgeries among older adults raised concerns among investors about the overall profitability of the health insurance industry.
As a result, not only did UnitedHealth's stock price decline significantly, but other insurers, such as $Humana(HUM)$, $CVS Health(CVS)$ and a broader index of managed care providers also experienced substantial drops in their stock prices.
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The market reacted negatively to UnitedHealth's comments because insurers had been benefiting from a delay in non-urgent surgeries during the COVID-19 pandemic, which resulted in cost savings. However, with surgeries becoming more frequent now, the potential for higher expenses and lower profitability is causing investor unease.
$UnitedHealth(UNH)$ raised concerns over increasing costs associated with surgeries among older adults, which raised doubts about the profitability of the health insurance industry as a whole.
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