Medicare Advantage Enrollment Up In January - HUM, UNH Gain Share
Analysts at BofA/Merrill say that companies such as United Health Group (NYSE: UNH) and Humana Inc (NYSE: HUM) will manage to increase their market share if rates are cut as a part of the healthcare reforms.
Medicare Advantage (MA) enrollment rose by 402,000 members in January, including 215,000 members for the public companies. This was consistent with the strength in the 2010 MA enrollment seen by MCOs in their Q409 earnings and was a reflection of a strong election period, according to BofA/Merrill. United Health Group led the public companies with the largest absolute increase in January with 75,000 (+3.9%) members, while Humana gained 16,000 members.
“We believe that if rates are cut as part of health care reform, HUM and UNH will further increase their market share and will emerge as the clear winners… As in any difficult reimbursement environment, the companies with the best scale and associated low operating cost structure tend to gain market share,” the analysts add.
