Analysts See More Financial Gains for Health Insurers
Most of the top U.S. health insurers increased their full-year earnings outlook as they reported first-quarter results despite tight competition, "uncertainties in the government-sponsored health plans they manage" and some spending "an unexpectedly high percentage of premium revenue in the latest quarter on patients' health bills," the Wall Street Journal reports.
According to the Journal, health insurers "by and large" are reining in costs and premium prices under commercial plans. They also are expanding Medicare and Medicaid enrollments, although they "face risks from Medicaid costs and reimbursements rates in some states and the potential for future Medicare reimbursement cuts," the Journal reports.
Goldman Sachs analyst Matthew Borsch said, "Our theme with this group is a slowdown, not a meltdown."
Deutsche Bank analyst Scott Fidel predicts that 2007 will be a good year for the managed care industry because of stable underwriting results and earnings that continue to be "quite strong" (Wisenberg Brin, Wall Street Journal, 5/15).