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Unitedhealth GroupThursday after the company after the company after the company cut your annual profit forecastReferring to higher than expected, medical expenses in their Medicare plans.
According to some Wall Street analysts, these gloomy health giant results, which are considered as a bell of an insurance industry, can become a warning sign for other companies with the so-called Medicare Advantage plans. It comes after a tumultuous 2024 for health insurers who have suffered low state payments, increasing medical expenses and public reaction after homicide From the chief leader of Unitedhealthcare, Brian Thompson.
UnitedHeldcare, the UNITEDHEALTH GROUP insurance group is the country’s largest supplier of these plans. Shares of a competitor Human fell on 5% Health decreased more than 1% and Respect 2%collapsed. Movie Does not have a Medicare Advantage business. On Thursday, its stock increased by almost 1%.
The UnitedHealth results in the first quarter show “ominous signs” of accelerating medical expenses in Medicare Advantage, TD Cowen Ryan Langston said on Thursday. He added that the company “correctly predicted” an increase in medical expenses in 2023, so the comments on Thursday “question” full views on each insurer.
Over the last year, higher medical expenses have gained the whole insurance industry as more and more elderly returns to the hospital to undergo the procedures they detained during the Covid-19 pandemic, such as replacement of joint and hip joints. But this question was not so significant in UnitedHealthcare before.
Barclays Analyst Andrew MC said the Unitedhealth issues could be less problems for companies that made “significant” outlets from some Medicare Advantage markets, including Humana and CVS, the message said on Thursday. Lots of insurers last year came out Due to higher medical expenses and reduced federal government compensation.
Meanwhile, this issue can become a bigger deal for companies that have acquired a large market share in Medicare Advantage, such as height and health Health alignmentAccording to Moka.
UnitedHealth noted that the growth of assistance or use, in its Medicare Advantage business, has come much higher than the company planned for a year, which was to help to increase at the speed that it corresponded to what it saw in 2024. But the trends that became apparent at the end of the first quarter suggest that care activity “increased” to the “level of this level”, the CEO of Andrei, which said during the capture on Thursday.
The jump was especially characteristic of a doctor and outpatient services that did not participate in the hospital during the night, he added.
“It’s very, very unusual”, Lance Wilks, Senior Bernstein’s actions, detach On Thursday, “Squawk Box” CNBC. He said the growth of use is a “really strange” that comes out of the high level of medical activity that the industry has seen over the last year.
Wilks added that Unitedhealth and the wide industry can “distract” “the intensity of some classes they perform to manage”, which causes discontent to the patient. For example, some insurers require a preliminary resolution that causes providers to get permission from the patient’s insurance company before conducting certain treatments.
“I think this is likely to be combined back from the wind and control over the company,” Wilks said. “I think the horrible thing happened to Brian Thompson and the company is part of this, and I think it also reflects the attention of the Ministry of Justice to” United “over the last couple of years.”
Reportedly UnitedHealth is fighting state investigation His Practice of Billing Medicare.
Also, on Thursday, UnitedHealth drew attention to the questions related to changes in the patient’s Optum health unit. This segment includes its pharmacy leader, which has talked about drug discounts with manufacturers on behalf of insurers and supports formulas among other duties.
But Witty said the company takes measures to improve the results and examines the problems associated with Optum and the increased medical expense, “very addressed when we look forward to 2026.”
If nothing else, insurers should get an increase next year. Trump’s administration in April stated that it would be significantly increase the level of compensation For Medicare Advantage Insurers, hiking on an earlier suggestion of Biden Administration.
