UnitedHealth flags Medicaid-related 'disturbance,' stock down

UnitedHealth Group (UNH) is leading other US insurers' stocks lower after the company's CEO, Andrew Witty, flagged a "disturbance" related to Medicaid reimbursement rates. After the expiration of a COVID-19 policy that mandated that states maintain enrollment for those covered by government Medicaid programs, states have begun to disenroll people from Medicaid.

Josh Lipton and Julie Hyman discuss how disenrollment has become a larger problem than insurers anticipated.

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This article was written by Gabriel Roy

Video transcript

United Health shares are leading other insurers lower the company's flag what it called a near term disturbance around reimbursement rates for Medicaid.

Uh the CEO Andrew Witty saying this at an industry conference today that this is gonna be an issue.

So the situation is this during the pandemic.

Um basically, states could not purge their Medicaid roles.

They had to keep everybody on Medicaid.

Now, obviously, we're getting past the pandemic and so state have begun to roll off those folks that means less revenue through Medicaid programs for these various insurers.

You would have thought it would have been a short term thing.

But what the CEO seems to be saying is that it's lasting longer, right?

That this is a sort of multi phase um developing situation.

Yeah, he he he used the words here, I guess what he was suggesting was a multi quarter cycle for states to start kind of paying, paying premium rates sufficient to cover the medical care that Medicaid members need.

And you did see this kind of ripple through, through through this universe, right?

The the kind of reactions we saw in Centene Humana elev.

So a lot of names getting dinged on that a lot of, you know, and United Health is the biggest one and probably one of the more diversified ones.

So, if you figure it's down there are other of these providers, um, you know, like a cent team, for example, that are more, um, oriented towards Medicaid.

And so that's why you see them falling as well.

Plenty of folks got spooked.