Health Insurers Sink as Rising Spending Gauge Alarms Investors
- Climbing medical-loss ratios cut down recent rally by insurers
- Anthem, UnitedHealth, Centene all flag rising medical spending
This article is for subscribers only.
Health-insurance stocks sank across the board after Anthem Inc. became the third insurer to report it is paying out a higher percentage of the premiums it takes in to cover patients’ medical claims.
Investors watch the so-called medical-loss ratio reported by health insurers closely. The number is a key measure of the companies’ financial health; when the ratio goes up, it can suggest that money is leaving the companies faster than it is arriving. Other issues, such as changes in tax law, can also affect the ratio.