CVS, Humana dip amid new mental health pointers, Leerink note (NYSE:HUM)

Shares of CVS Health (NYSE:CVS) and Humana (NYSE:HUM) moved decrease Monday after the White House introduced new health insurance coverage necessities and Leerink warned that insurers could possibly be going through heightened danger to their Medicare Advantage Star rankings.

Humana shares have been down 3% whereas CVS shares slid 2% in noon buying and selling. Shares of Centene (NYSE:CNC) and UnitedHealth have been largely flat as Elevance (NYSE:ELV) inventory rose 1% and Cigna (NYSE:CI) 2%.

Earlier Monday, the Biden Administration introduced new necessities for health plans aimed toward enhancing entry to mental health companies for individuals lined by personal insurance coverage, in keeping with a press release issued by the White House.

Under a newly issued last rule, which is meant to strengthen the Mental Health Parity and Addiction Equity Act of 2008, or MHPAEA, health plans shall be required to guage their supplier networks, how a lot they pay out-of-network suppliers, and the way typically they require and deny prior authorizations for mental health companies. The evaluations are meant to indicate the place plans are failing to fulfill MHPAEA’s necessities.

The new rule additionally extends MHPAEA necessities to non-federal governmental health plans, akin to these provided to state staff, the White House assertion added.

The U.S. Department of Health and Human Services additionally plans to launch new instruments to make sure that personal Medicaid health plans are additionally complying with MHPAEA necessities, the assertion added.

Also on Monday, Leerink mentioned in a note that 62% of the Medicare Advantage minimize factors for 2025 shall be growing, with many moved by the utmost allowable change of 5 factors based mostly on guardrails.

“Sixty-two percent of the cut points moved higher, which if plans don’t see similar movement higher in their performance could elevate the risk that Star ratings could decline,” Leerink mentioned in its note.

Leerink mentioned it estimates “nearly all plans would see risk to most large H contracts, with Elevance (ELV) faring perhaps the best.”

It added that United Health (NYSE:UNH) “could potentially see all five of its top H contracts decline making up 50% of its membership,” whereas Humana (HUM) “faces potential risk to four of its five top contracts with nearly 70% of its membership impacted.”