Sector Wrap: Insurance Stocks Mostly Climb

 

Thursday, Apr 09,2009, 11:10:55 AM   Click:

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INDIANAPOLIS_Several insurance stocks outperformed the overall market in trading Tuesday, a day after the federal government has published data on the rate of Medicare Advantage that points to a lower payment next year.

An insurer saw its share rise by more than 5 percent, and four others were also gains in afternoon trading. Meanwhile, the Standard & Poor's 500 Index has dropped by more than 2 percent.

The Centers for Medicare & Medicaid Services released after the markets closed on Monday, Medicare Advantage rates for 2010. Insurance stocks dove in February after CMS released preliminary information.

But the government Monday issued the final figures that were "more positive" than the first reports, Wachovia analyst Matt Perry said in a research note.

However, he expects to lower Medicare Advantage rates 4 percent next year.

"Medicare remains viable, but at a lower margin in 2010, Perry wrote.


Medicare Advantage plans allow elderly and disabled to receive benefits by private health insurers. They receive a government grant and generally offer more benefits than traditional Medicare. Over 10 million people are enrolled in them.

Payment rates of these plans vary by county and health of patients, among many other factors.

BMO Capital Markets analyst Dave Shove said Tuesday in May reflect gains relief on Monday, the rate of information was not worse.

"I think it's just a thing of relief," he said. "To have a strong group in a market low in fact seem more than a coincidence."

Louisville, Ky.-based Humana Inc. Medicare Advantage a major company, and its share increased by 4 percent, or $ 1.07, to $ 27.38. The same is true Minnetonka, Minn.-based UnitedHealth Group Inc., which saw its stock rise nearly 6 percent, or $ 1.25, to $ 23.18.

Other insurers with large corporations Medicare Advantage includes Nashville, Tenn.-based HealthSpring Inc. Tampa, Fla.-based Health Plans WELLCARE HealthSpring Inc. shares fell 2 cents to $ 8.48, while WELLCARE stock rose 3 per cent, or 43 cents, to $ 13.19.