Major insurance companies drop on sector woes
Although UnitedHealth Group reported a positive fourth quarter—including a 62% increase for its Ingenix database system business—the company’s stocks have since plummeted, partially because of an ongoing investigation by New York Attorney General Andrew Cuomo. On March 12, shares fell to a 52-week low, bottoming out near $36 after seeing prices as high as $60 in December 2007. …
… Shares of Humana Inc. also plummeted this week after the company decreased its earnings forecast for 2008. The company’s shares fell close to $40, a far drop from the $87 price tag the insurers’ stocks saw in mid-January.
“Humana this year miscalculated how many elderly with serious medical conditions would choose its Medicare drug plan, among the cheapest available,” executives told Bloomberg March 12. “The mistake added $160 million to the company’s Medicare drug costs in the first two months of this year.”
WellPoint, the first domino to fall, lowered its forecast on March 10, triggering what Bloomberg called “the worst decline in managed-care stocks in a decade.”
WellPoint’s stock prices tumbled to $46 March 11 and have held since. The company ended 2007 near $90.
Won’t be long before they are begging for a government takeover.