Health Stocks Rise As Worries Ease About Medicare Advantage Payment Rate Cuts

Shares of Humana, UnitedHealth, Aetna and others went up Monday as estimates of the 2015 payment rate reduction estimates appeared to land closer to 4 percent than to the initial expectations around 7 percent or even deeper.

The Wall Street Journal: Health Insurers Rally As Fears Over Medicare Cuts Ease
Shares of Humana Inc. and other U.S. health insurers rose Monday as the proposed Medicare reimbursement cuts for 2015 weren't as bad as had been feared. The Centers for Medicare and Medicaid Services issued its proposal late Friday for the rates it will pay health plans in 2015. Cuts had been expected, with some set to phase in automatically under the federal health-care law. Humana, in a filing Monday to the Securities and Exchange Commission, said it expected CMS' proposal to cut Medicare Advantage funding for 2015 by 3.5% to 4%. Humana previously had said it expected a decline of 6% to 7% (Stynes and Mathews, 2/24).

Reuters: U.S. Insurers Say Proposed Medicare Cuts Less Than Feared
U.S. health insurers including Humana Inc said on Monday that the government's proposed cuts to privately run Medicare programs appear to represent a funding decline of around 4 percent, less than the possible cuts of 7 percent or deeper that analysts had been expecting. Shares of most insurers rose on Monday, with Humana leading the pack, up 9.2 percent at $112.29 on the New York Stock Exchange in early afternoon. Shares of UnitedHealth Group Inc were up 2.8 percent at $75.91 and Aetna Inc was up 2.6 percent at $72.24 (Humer, 2/24).

Meanwhile, Tenet reports on the latest quarter -

The Wall Street Journal: Tenet Healthcare Swings To A Loss
The broader hospital sector has been consolidating as the industry is poised for major changes related to the U.S. health-care overhaul. Tenet last year completed its acquisition of Vanguard Health Systems Inc., a move that aims to broaden its geographic reach. Hospitals also continue to face a slowdown in patient traffic that has been viewed as tied—at least partly—to the recession and its aftermath. In the latest quarter, Tenet reported adjusted admissions fell 0.5%, as inpatient admissions fell 2.3% (Prior, 2/24). 

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