We offer some predictions for 2009. Enrollment pressure, pricing challenges, a tough investment environment, develeraging of the rest of the economy lead to increased management focus on optimizing administrative expenses.
Health plan stocks decreased 10.3% for the month of November. All valuation indicators decreased last month. Since only one of the fourteen plans reported earnings last month, it is reasonable to assume the 10.3% decrease in stock price was driven by less favorable sentiment rather than company fundamentals. The broader market, measured by the S&P 500, fell by 7.5%.
One of the fourteen publicly-traded health plans announced earnings last month. HealthNet had a 72.9% decrease in net income as the commercial health benefits ratio increased 4.6% and non-operating income fell 101.0% in the third quarter.
AMERIGROUP Corporation announced that it will be offering Medicaid in two counties in Nevada. The company also entered into an agreement with Centene to provide services to its Medicaid members in New Jersey.
Aetna announced that it has appointed Lonny Reisman, M.D. as Chief Medical Officer. Health Net announced that Steven Sell will be president of Health Net of California and Jonathan H. Scheff, M.D., M.B.A., will serve as Chief Medical Officer. HealthSpring announced that Chief Financial Officer Kevin M. McNamara will be retiring.
Our bi-annual review of the financial performance of Blue Cross Blue Shield Plans shows earnings will decrease for 2008.
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