The Wall Street Journal reported April 7 that stock prices for Medicare Advantage (MA) companies sunk in February in light of federal government plans to make cuts to the program. We've reported extensively on President Obama's intent to cut billions of dollars from MA, which tends to cost 13%-14% more than traditional Medicare.
Well, stocks rose after CMS released MA rates for 2010 and analysts realized the cuts, weren't so bad on April 6 -- but, expect to start seeing changes for 2011.
The agency gave a preliminary estimate of a 0.5% increase in the National Per Capita Medicare Advantage Growth Percentage. The announcement includes a Medicare Advantage Growth Percentage of 0.81%.
A look at morning trading on April 9 shows:
- Humana (HUM) is up 4.2% for the week, trading at $28.56 a share after being down to about $25 a share on April 7.
- UntitedHealth (UNH) is up 3.5% for the week, trading at $23.59 a share after being down to about $21 a share on April 7.