Key things

  • UnitedHealth warned that more seniors are opting for elective surgeries, driving up costs.
  • The end of mask mandates and COVID-19 restrictions have pushed many seniors to procedures they could have delayed.
  • Shares of UnitedHealth fell more than 6% on Wednesday following the news. Shares of other health insurance companies also fell.

UnitedHealth Group (UNH) was the top-performing stock in the Dow on Wednesday after the health insurer warned of rising costs due to a bigger-than-expected jump in surgeries for people 65 and older.

The company said at the Goldman Sachs healthcare conference that demand for surgeries from its patients had increased Medicare health plans, especially knee and hip procedures.

Tim Noel, CEO of UnitedHealth’s Medicare and retirement business, said now that mask mandates and other COVID-19 restrictions have been lifted, more seniors are comfortable accessing services for treatments they may have previously put off.

Chief Financial Officer John Rex said the trend toward more elective surgeries could push the claims-to-premium ratio toward the upper end of its full-year outlook in the second quarter.

Shares of UnitedHealth Group fell more than 6% to their lowest level in a year on Wednesday after the comments. Shares of other health insurance providers were also dragged down.

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