Latest news with #medicalcosts
Yahoo
2 hours ago
- Business
- Yahoo
Why UnitedHealth Stock Is Sinking Today
Key Points UnitedHealth Group's stock declined following its Q2 earnings report, which revealed a significant miss on earnings per share and a lower-than-expected full-year outlook. The company attributed its disappointing guidance to rising medical costs and changes in its business plans. Beyond financial performance, UnitedHealth is facing multiple challenges, including a CEO resignation, two DOJ investigations into Medicare billing, and allegations of unethical practices related to nursing home payments. 10 stocks we like better than UnitedHealth Group › Shares of UnitedHealth Group (NYSE: UNH) are falling on Tuesday, down 5.4% as of 2:20 p.m. ET. The drop comes as the S&P 500 (SNPINDEX: ^GSPC) declined 0.3% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) fell 0.2%. The troubled health insurance giant set worse-than-expected guidance on Tuesday. UnitedHealth continues to struggle The company reported its Q2 financials today, revealing the insurer is still very much struggling. The company was able to deliver on revenue, reporting $111.62 billion versus the expected $111.52 billion, but it missed significantly on earnings per share (EPS), reporting $4.08 per share when Wall Street expected $4.48 per share. More concerning was the company's outlook for the full year. UnitedHealth expects EPS of at least $16 and sales of $445.5 billion to $448 billion. Wall Street's expectations were EPS of at $20.9 and sales of $449.2. The company cited rising medical costs and abandoned "previously planned portfolio actions" as reasons for the disappointing outlook. UnitedHealth's problems mount This latest disappointing quarter is the latest in a series of bad news related to the massive insurer: The company's CEO abruptly stepped down, citing "personal reasons"; it was revealed that the DOJ currently has two investigations into the company's Medicare billing practices; and an exposé published by the Guardian alleges the company was paying nursing homes to keep residents out of the hospital when they needed elevated levels of care. There are just too many issues facing UnitedHealth at the moment, with no clear picture of an imminent turnaround. I would stay away from the stock. Should you buy stock in UnitedHealth Group right now? Before you buy stock in UnitedHealth Group, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and UnitedHealth Group wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $633,452!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,083,392!* Now, it's worth noting Stock Advisor's total average return is 1,046% — a market-crushing outperformance compared to 183% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of July 29, 2025 Johnny Rice has no position in any of the stocks mentioned. The Motley Fool recommends UnitedHealth Group. The Motley Fool has a disclosure policy. Why UnitedHealth Stock Is Sinking Today was originally published by The Motley Fool
Reuters
13 hours ago
- Business
- Reuters
Humana bucks industry gloom as insurer keeps handle on medical costs
July 30 (Reuters) - Humana (HUM.N), opens new tab raised its annual profit forecast after beating quarterly estimates on Wednesday, as the U.S. health insurer succeeded in keeping its medical costs in check, in contrast to several of its rivals who recently slashed their expectations. Its shares rose 6% in early trading as the company also highlighted better-than-expected membership in its individual Medicare Advantage plans, as well as strong performance in its CenterWell care-delivery unit. Under Medicare Advantage plans, the U.S. government pays private insurers a set rate to manage healthcare for people aged 65 and older, and those with disabilities. CenterWell offers clinical programming for seniors, including primary care services and in-home health visits. Humana has been "transparent" in discussing utilization, transparency and the impact of government payment changes, said George Renaudin, president of insurance. "We reduced more benefits, and more significantly than all of our competitors in 2025." Humana reported a quarterly medical cost ratio - the percentage of premiums spent on medical care - of 89.7%, up from 88.9% a year earlier, but in line with analysts' estimates. Larger competitor UnitedHealth (UNH.N), opens new tab flagged underestimation of medical costs on Tuesday, and also provided a full-year profit forecast that fell short of analysts' already diminished estimates. The industry has been battling stubbornly high costs for the last two years due to increased use of healthcare services across government-backed plans. Humana projected full-year profit to be about $17 per share, compared with its previous estimate of about $16.25 and analyst estimates of $16.38 per share, as per LSEG data. "We think this increase will be received positively, as the company's 2025 repricing actions appear to be having their intended effect," said J.P. Morgan analyst Lisa Gill. Humana CEO Jim Rechtin said the company was confident in the growth outlook for Medicare Advantage and value-based care. Under a value-based care model, providers are paid based on how well they keep patients healthy, such as preventing hospital readmissions, which larger rival UnitedHealth has said it has struggled to integrate. UnitedHealth has been treating new value-based patients at a lower reimbursement rate than they deem as fair, said Morningstar analyst Julie Utterback. Humana said it remained optimistic that its pricing of the Medicare Advantage plans for 2025 will drive margin improvement. It also expects membership decline in the plans to be lower than previously anticipated. The company earned a second-quarter profit of $6.27 per share, topping estimates of $5.92.
Reuters
16 hours ago
- Business
- Reuters
Humana raises annual profit forecast as medical costs stabilize
July 30 (Reuters) - Humana (HUM.N), opens new tab raised its annual profit forecast after beating quarterly estimates on Wednesday, as the U.S. health insurer succeeded in keeping its medical costs in check, in contrast to several of its rivals who recently slashed their expectations. The company said its strong quarterly performance was also driven by better-than-expected membership in individual Medicare Advantage plans and strength in its primary care segment CenterWell. Its shares rose nearly 7% in premarket trading. "Following several reductions to guidance, we think this increase will be received positively, as the company's 2025 repricing actions appear to be having their intended effect," said J.P. Morgan analyst Lisa Gill. Larger competitor UnitedHealth (UNH.N), opens new tab flagged underestimation of medical costs on Tuesday, and also provided a full-year profit forecast that fell short of analysts' already diminished estimates. Humana reported a quarterly medical cost ratio - the percentage of premiums spent on medical care - of 89.7%, up from 88.9% a year earlier, but in line with analysts' estimates of 89.71%. The industry has been battling with stubbornly high costs for the last two years due to increased use of healthcare services across government-backed plans. Humana is the top provider of Medicare Advantage plans under which the U.S. government pays private insurers a set rate to manage healthcare for people aged 65 and older, and those with disabilities. CEO Jim Rechtin said the company was confident in the growth outlook for Medicare Advantage and value-based care. "We feel good about our solid performance in the first half of the year." The health insurer said it remained optimistic that its pricing of the Medicare Advantage plans for 2025 will drive margin improvement. It also expects membership decline in the plans to be lower than previously anticipated. Humana projected full-year profit to be about $17 per share, compared with its previous estimate of about $16.25. Analysts on average were expecting a profit of $16.38 per share, as per LSEG data. For the second quarter, the company earned a profit of $6.27 per share, topping estimates of $5.92.
Forbes
17 hours ago
- Business
- Forbes
Humana Reports $545 Million Profit As Costs Land Within Expectations
Humana Wednesday reported $545 million in second quarter profits as the health insurer's medical ... More cost trends fell in line with expectations. In this photo is a Humana office in Louisville, Kentucky, US, on Monday, July 31, 2023. (Photographer: Jon Cherry/Bloomberg) Humana Wednesday reported $545 million in second quarter profits as the health insurer's medical cost trends fell in line with expectations. Like most of its rivals in the health insurance industry, Humana has been seeing higher costs, particularly in its Medicare Advantage plans, which are a big share of Humana's business. Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines with some also offering vision, dental care and wellness programs. 'We delivered solid results in the second quarter with our insurance segment benefit ratio of 89.9% reflecting medical cost trends that developed in line with our expectations and (second quarter) adjusted earnings per share slightly higher than anticipated,' Humana said in prepared management remarks released along with the company's second quarter earnings report. The benefit expense ratio, which is the percentage of premium revenue that goes toward medical costs, was 89.9% compared to 89.5% in the second quarter of last year. 'We continue to expect the FY 2025 insurance segment benefit ratio to be in a range of 90.1% to 90.5%,' Humana said in its prepared remarks. Still, Humana's net income fell to $545 million, or $4.51 per share, compared to $679 million, or $5.62 a share in the year ago quarter. Revenue rose to $32.4 billion, compared to $29.5 billion in the year-ago period. Given the more predictable cost trends and performance of its Centerwell health services business, which reported growth in specialty pharmacy and primary care, Humana is raising its full year adjusted earnings per share outlook 'from approximately $16.25 to approximately $17.00 supported by solid execution and results through June 30, 2025,' the company said in its prepared remarks. Humana also raised its revenue forecast to be 'at least $128 billion,' up from prior guidance of $126 billion to $128 billion. 'We feel good about our solid performance in the first half of the year,' Humana President and CEO Jim Rechtin said. 'It reinforces our strategy to continue investing in improved outcomes, operational excellence and a better experience for our customers and investors.'
Reuters
18 hours ago
- Business
- Reuters
Insurer Humana raises annual profit forecast as medical costs stabilize
July 30 (Reuters) - Humana (HUM.N), opens new tab raised its annual profit forecast on Wednesday, as the U.S. health insurer bets on its efforts to rein in higher medical costs that have plagued the sector, sending its shares up nearly 5% in premarket trading. The company is a top provider of Medicare Advantage plans under which the U.S. government pays private insurers a set rate to manage healthcare for people aged 65 and older, and those with disabilities. The industry has been battling with persistently high costs for the last two years due to increased use of healthcare services across government-backed plans. However, Humana said its medical costs were in line with its expectations. "We feel good about our solid performance in the first half of the year," CEO Jim Rechtin said in a statement. It reported a quarterly medical cost ratio - the percentage of premiums spent on medical care- of 89.7%, up from 88.9% a year earlier, but in line with analysts' estimates of 89.71%. The company said its quarterly performance was partly driven by better-than-expected membership in its individual Medicare Advantage (MA) plans, as well as strength in its primary care segment CenterWell. Humana expects membership decline in its MA plans to be lower than previously anticipated and said it remains confident that its insurance pricing will drive margin improvement. The company on Wednesday projected full-year profit to be about $17 per share, compared with its previous estimate of about $16.25. Analysts on average were expecting a profit of $16.38 per share, as per data compiled by LSEG. For the quarter, Humana earned a profit of $6.27 per share, compared to estimates of $5.92.
