Insurer stocks rise after Reid's 'opt-out' announcement

"A day after Senate Majority Leader Harry Reid proposed an 'opt-out' public option plan, health-care insurers' stocks climbed Tuesday," Dow Jones Newswires/The Wall Street Journal reports. "Led by Centene Corp.'s (CNC) 6% gain, fueled by an upside earnings surprise, all major carriers were in the black." But "there may have been more to Tuesday's action in health-insurer stocks. A fear of added costs incurred due to H1N1 vaccinations for swine flu seemed to subside as Centene still managed to beat Street estimates by a penny when it reported third-quarter earnings Tuesday" (Britt, 10/27).

Portfolio reports: "It's not a bad time for insurance companies to come down with a case of the swine flu. The cost of treating and preventing the flu is adding to medical claims, which means health insurers are reporting lower earnings this quarter even as Washington lawmakers accuse them of having inflated profit." Amerigroup Corp. and UnitedHealth Group Inc. have both recently blamed swine flu for low profits (Chase, 10/27).

Meanwhile, The Wall Street Journal reports that "WellPoint Inc.'s third-quarter earnings fell 11% amid declining enrollments and asset write-downs, but results were better-than expected" (Stynes, 10/28).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.