Here's Why Healthcare Stocks Are Under Pressure on Wednesday
Is the issue with Medicaid or UnitedHealth again?
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* Competitor conference comments pull down healthcare stocks, including Elevance Health.
* Here’s what we’ll be listening to in Elevance’s upcoming conference presentation.
Shares of Elevance Health ELV, along with other HMOs, are being pulled lower following comments from UnitedHealth UNH at the Bernstein Strategic Decisions Conference about a "disturbance" coming in its Medicaid business.
The heart of the matter appears to be states paring enrollees in their Medicaid health programs following the end of the pandemic emergency. This means programs to drive membership will be important, and that is something Elevance has excelled at historically.
And while we keep an eye on those state figures, we should also remember that in 2025 the federal government is projected to pay between $500B and $600B in Medicare Advantage payments to private health plans, a 3.7% year over year increase.
We also can’t forget management at UnitedHealth has stumbled of late, first with cost issues in its Q4 2023 earnings, something we didn’t see at Elevance or others, and then with its recent cyberattack.
When Elevance presents on Friday at the Bernstein conference, we’ll be listening to see how management addresses these competitor comments. Should we learn this is once again a concern solely for UnitedHealth, we are likely to see ELV shares reclaim some of their recently lost gains.
At the time of publication, TheStreet Pro Portfolio was long ELV.
