Insurer stock prices continue to rise, with stock performance by the major U.S. insurers outstripping the stock market by large margins, according to research by Brian Klepper of Worksite Health Advisors.
In the period Klepper has been tracking the stocks of Humana, UnitedHealthCare, Cigna and Anthem (Elevance), Humana’s stock price has risen from $31.58 to $486.52, a 1541 percent price growth, Klepper’s figures show. United’s price rose from $27.51 to $504.19, a whopping 1833 percent growth.
In the same period, the S&P 500 rose by 567 percent, according to Klepper. He updates the figures periodically. Here is the October 2022 chart. Note that growth slowed a bit from last year.
The growth in revenues is fueled by a lot of federal spending, Klepper notes, citing research by Wendell Potter, a former insurance company exec turned health system critic. Potter writes on his blog about how much of current revenues for major insurers come from tax dollars — in the form of Medicare Advantage income, primarily, he says.
Potter writes: “Over the past 10 years, UnitedHealth’s Medicare Advantage enrollment increased by about 4.4 million, from 2.6 million to almost 7 million. During that same time frame, its commercial (private paying) enrollment increased by just 70,000. One reason is that employers increasingly have found that offering coverage to their workers is prohibitively expensive. Fewer than half of the nation’s employers now offer subsidized coverage to their employees and dependents….
“Medicare Advantage is hands down the industry’s biggest cash cow these days. Wall Street is thrilled that so much of our taxes is going to a handful of big New York Stock Exchange companies,… (Insurers are paid 4 percent more than it would cost to cover similar people in traditional Medicare, according to MedPAC).”
