UnitedHealth Group (UNH) rose modestly early Monday after a federal judge ordered a rerating of the Dow Jones giant’s Medicare Star Ratings. Rival health insurer Humana (HUM), which is heavily exposed to Medicare Advantage, also advanced.
Separately, Wells Fargo downgraded hospital chain HCA Healthcare (HCA).
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A federal judge in Texas, in a Friday ruling, ordered the Centers for Medicare & Medicaid Services to recalculate UnitedHealth’s Medicare Advantage star ratings for 2025. Those star ratings are key for bonus payments to insurers.
UnitedHealth, in a September lawsuit filing, had argued that CMS downgraded its star ratings due to a single customer service call. Centene (CNC), another health insurer, filed a similar lawsuit in October.
In early October, Humana stock plunged to a four-year low after the insurer said that only 25% of its Medicare Advantage members were enrolled in plans that will earn at least four stars in 2025 in the government’s five-star system. That’s down from 94% in 2024.
UnitedHealth Stock
UnitedHealth stock rose 2% in premarket trade. Shares edged down 0.2% last week, but rebounded from their 50-day line, closing Friday just above its 21-day.
Humana stock gained 4.5% early Monday. Shares reclaimed their 50-day line last week, continuing to rebound from early October. But HUM stock is still below its sliding 200-day.
Centene, which is more Medicaid-focused, was not yet trading. CNC stock hit a three-low last week, but ultimately jumped 5.1%.
Meanwhile, HCA stock fell 1.5% before the open, around four-month lows. Wells Fargo downgraded the hospital giant to underweight from equal weight, cutting its price target to 320 from 400. HCA and other hospital stocks have tumbled in the past few weeks.
Please follow Ed Carson on Threads at @edcarson1971 and X/Twitter at @IBD_ECarson for stock market updates and more.
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