With overpayment allegations gaining strength and growing awareness of patient dissatisfaction, investors are becoming wary of the MA landscape.
“In 2023, enrollment in Medicare Advantage, the version of Medicare run by private insurers, surpassed 50% of eligible beneficiaries for the very first time. Going by this headline, or perhaps the predictable flood of advertisements for plans during the fall’s open enrollment period, you might be fooled into thinking 2023 was MA’s best year yet. In fact, the opposite is true.
Investors in MA insurance companies experienced a rude awakening in late January, with insurer stocks plummeting in the face of earnings reports showing profits falling far below expectations in the last quarter of 2023. Companies like CVS Health and UnitedHealth Group saw losses of 5.2% and 6.2% respectively, while Humana, whose business model relies heavily on the MA program, fell an astonishing 14.2%. These insurers cited higher than average health care utilization rates as the culprit and warned that 2024 would likely see more of the same. At the same time, private equity investment in MA has fallen, showing waning confidence in the program.”
(Note: link has a paywall)
Potter, W., & Verhoef, P. (2024, March 1). Medicare Advantage is bad for patients and bad for investors. STAT. https://www.statnews.com/2024/02/28/medicare-advantage-traditional-overpayment-patient-dissatisfaction-investors/
Improve Medicare Advantage reimbursements with payer contract management that puts payer rules in the hands of clinicians & billers.
