On average, health plan stock prices increased slightly, by 0.3%, for the month, outperforming the market. Nine of the fourteen publicly-traded health plans, however, experienced declines in their stock prices. Valuation indicators for the month of October were mixed.
Nine of the fourteen publicly-traded health plans reported earnings last month. Aetna experienced a decline in operating income due to higher benefit costs. AMERIGROUP’s net income decreased on declines in non-operating income and higher health benefit expenses. Centene’s net income increased due to membership growth and increased non-operating income. Coventry experienced strong growth in its Medicare Advantage business, increasing revenues by 17.7%. Despite nonoperating losses, HealthSpring reported an increase of 44.1% in net income primarily due to growth in Medicare Advantage membership and premiums. Molina experienced declines in operating earnings attributed to a deterioration of its health benefit ratio. Universal American’s net income grew slightly despite a loss in non-operating income. Membership for UnitedHealth declined 3.2%, however, premium rate increases and nonoperating gains led to increased net earnings of 15.6%. WellPoint experienced improvement to its net margins on increased non-operating income and lower health benefit costs.
Centene Corporation announced it has resolved previous litigation with AMERIGROUP Corporation and will sell certain assets of its New Jersey Medicaid Business. Coventry Health Care, Inc. announced it has entered into an agreement to acquire Preferred Health Systems, Inc., a wholly-owned subsidiary of Via Christi Health System.
Blue Cross Blue Shield of North Carolina announced J. Bradley Wilson as President. Christopher J. Walsh and Mitchell Zamoff will both serve as UnitedHealth Group’s Executive Vice President and General Counsel. WellCare Health Plans, Inc. named Scott D. Law as its Senior Vice President, Health Care Delivery.
This month’s insert looks at the background of the PBM industry, prescription drug trends, cost-control methods used by PBMs, and an analysis of the three leading PBMs.
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