After performance ratings for health insurance plans were made public by a federal government program, shares of pharmacy operator CVS Health Corp (CVS stock) plunged as much as 10%, and insurer Centene slid 8%, leading drops in major U.S. health insurers. The scores were revealed to the public today.
CVS Health Plan (CVS Stock)
CVS’s largest health insurance plan for Medicare customers was given a poorer performance rating, the firm said on Thursday. As a direct result of this news, the market value of the business has dropped by more than $11.6 billion as of 11:30 a.m. Eastern Time on Friday.
This year, shareholders of the corporation have had their investment reduced by more than 13%.
Centene’s stock price dropped by more than 10% so far in 2018, and the company’s market worth has decreased by $3.5 billion as of 11:30 a.m. Eastern Time.
According to analysts at Oppenheimer, year-over-year decreases in Star Ratings were anticipated owing to the expiration of the one-time COVID-specific disaster assistance program. They said that CVS and Centene were among the companies with the largest year-over-year declines.
According to analysts from J.P. Morgan, “CVS (NYSE:CVS) will not lower benefits in order to mitigate the effect,” which means that the business will completely absorb the 5% margin blow that resulted from missed quality bonus payouts.
UnitedHealth Group, Cigna Corporation, Elevance Health, Alignment Healthcare, and Humana Inc. were among the other health insurers whose shares declined between 1% and 3%.
According to the analysts at Stephens, the downward shift in Star Ratings will present a revenue headwind for the entire sector in 2024. They added that a significant reduction in the number of Centene and CVS members enrolled in 4+ Star plans for 2023 will lead to operational hurdles for both companies.
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Author Valerie Remorosa 
