Categories: Business

CVS Well being, Centene lead well being insurers decrease after 2023 Medicare rankings By Reuters

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© Reuters. FILE PHOTO: CVS Well being brand is seen displayed on this illustration taken, Might 3, 2022. REUTERS/Dado Ruvic/Illustration

(Reuters) -Shares of drugstore operator CVS Well being (NYSE:) fell as a lot as 10% and insurer Centene (NYSE:) slumped 8%, main declines in main U.S. well being insurers after efficiency rankings for medical insurance plans from a federal authorities program have been launched.

CVS’ largest medical insurance plan for Medicare recipients acquired a decrease efficiency score, the corporate stated on Thursday, resulting in greater than $11.6 billion being wiped off its market worth by 11:30 a.m. ET on Friday.

The corporate’s shares have fallen greater than 13% this yr.

Centene, which has fallen greater than 10% this yr, additionally misplaced $3.5 billion of its market worth by 11:30 a.m. ET.

12 months-over-year declines in Star Scores have been anticipated as a result of expiry of the one-time COVID-specific catastrophe reduction program, Oppenheimer analysts stated, including that CVS and Centene have been among the many greatest decliners.

“CVS is not going to scale back advantages to offset the impression, which means the corporate will totally soak up the 5% margin hit from misplaced high quality bonus funds,” in response to J.P. Morgan analysts.

Well being insurers UnitedHealth Group (NYSE:), Cigna Corp (NYSE:), Elevance Well being, Alignment Healthcare and Humana Inc (NYSE:) additionally fell between 1% and three%.

The downward shift in Star Scores will current sector-wide income headwind in 2024, Stephens analysts stated, including {that a} sharp discount in Centene and CVS members in 4+ Star plans for 2023 will result in operational hurdles for each the businesses.

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