During the Bernstein investor conference, a UnitedHealth executive discussed the challenges with Medicaid due to ongoing enrollment disruptions that started a year ago. The company’s shares fell 4.2%, while competitors like Humana, Centene, and Elevance Health saw declines ranging from 2.6% to 3.7%.
UnitedHealth bases premium rates on expected enrollment levels and medical services utilization. However, the discontinuation of a COVID-19 policy in April 2023 led states to reassess Medicaid coverage eligibility, resulting in disenrollments and renewals. The Kaiser Family Foundation estimated that millions of people were disenrolled from Medicaid and CHIP programs, with ongoing renewals.
Analysts like Scott Fidel from Stephens noted concerns about the discrepancy between rates and costs in Medicare Advantage programs over the past year and how this trend could also affect Medicaid plans. Additionally, insurers were surprised by increased healthcare utilization within these programs in late 2023 and early 2024, which has had an impact on their operations and is still being assessed.
