What impact did the recent freeze have on health insurance stocks?
Health insurance companies wake up today with a headache. I'm David Brancaccio in Los Angeles. Stock in the health insurance company Humana is down 15% in pre-market trading right now. Elevance, which does Blue Cross Blue Shield, down more than 7%. The staffer reports the government plans to give them just a small raise for privatized Medicare Advantage plans.
Marketplace's Nancy Marshall-Genzer explains.
Medicare pays big insurers like UnitedHealth Group and CVS Health to manage Medicare Advantage plans for seniors. Yesterday, the Centers for Medicare and Medicaid Services, which administers Medicare, projected a rate increase for these insurers of slightly less than 1%. The companies were expecting closer to 4 or 5%.
The government is trying to crack down on companies that read patients' medical charts and conclude they have additional illnesses. Insurers are paid more when patients are sicker. Now, Medicare wants to change that, only paying for new illnesses diagnosed during a visit to a doctor's office.
The Centers for Medicare and Medicaid Services says it's trying to limit growing unnecessary costs from, quote, coding practices that do not lead to better quality coverage. It'll finalize new rates by this April. The trade group America's Health Insurance Plan says the proposed low rate could result in benefit cuts and higher costs for seniors. I'm Nancy Marshall-Genzer for Marketplace.
Given this, UnitedHealth stock is down 12 percent pre-market now, this despite reporting quarterly profits today that beat expectations. We don't expect U.S. central bankers to lower interest rates this week. The Fed starts meeting today, and its briefing on inflation, jobs, and growth comes just after lunch Eastern time tomorrow. Dow futures are down 0.2%, but S&P futures are up 0.4%.
NASDAQ futures are up 0.6% now. 5.3 million people have not made a student loan payment in a year, part of the legacy of pandemic-era policies to ease loan repayment. The plan had been for the government to resume grabbing paychecks and tax refunds for those in default, but we continue to cover the Trump administration's recent about-face on this.
The wage and tax garnishments have been suspended. But for how long? Betsy Mayotte is founder and president of the Institute of Student Loan Advisors. She spoke with our podcast, Make Me Smart.
I want to emphasize that I do think this is a temporary reprieve. I would not be surprised if they started doing it again either after July 1st when a lot of the H.R. 1 provisions come into play or after midterms.
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