WEBVTT - Deep Dive: Centene Drags Down Heath Insurers

0:00:00.080 --> 0:00:01.640
<v Speaker 1>Let's take a look at some of the stocks on

0:00:01.639 --> 0:00:04.400
<v Speaker 1>the movie also alongside normal Linda and we're joined by

0:00:04.680 --> 0:00:08.799
<v Speaker 1>Glenn Luso, senior healthcare analysts for Bloomberg Intelligence. Glenn, what

0:00:08.960 --> 0:00:10.880
<v Speaker 1>is senting and what's the news today?

0:00:10.920 --> 0:00:15.960
<v Speaker 2>Let's start there? Okay, So SATIN is a health insurance

0:00:16.440 --> 0:00:22.959
<v Speaker 2>of focusing mainly on medigate and health insurance marketplace. The

0:00:23.040 --> 0:00:27.160
<v Speaker 2>reason this stock is down is the company withdrew twenty

0:00:27.560 --> 0:00:32.760
<v Speaker 2>five guidance highlighting higher acuity and slower membership growth in

0:00:32.960 --> 0:00:38.760
<v Speaker 2>its marketplace, and secondarily also highlighting increase in medical costs

0:00:39.400 --> 0:00:43.960
<v Speaker 2>in some of the markets in its medigate geographies.

0:00:44.520 --> 0:00:47.159
<v Speaker 3>So I know in fatures have been really growing worried

0:00:47.200 --> 0:00:51.519
<v Speaker 3>here investors as well about the changes that could happen

0:00:51.640 --> 0:00:55.080
<v Speaker 3>to the Affordable Care Act. What is this all foreshadow

0:00:55.120 --> 0:00:56.640
<v Speaker 3>about the broader industry?

0:00:56.960 --> 0:00:59.720
<v Speaker 2>Most of the focus recently has been obviously on the

0:01:00.160 --> 0:01:03.520
<v Speaker 2>hang from the Reconciliation Bill. You know, there was some

0:01:03.600 --> 0:01:06.960
<v Speaker 2>sort of improved visibility going into next year and the

0:01:07.040 --> 0:01:09.520
<v Speaker 2>year after because of that, but at the same time,

0:01:10.080 --> 0:01:14.080
<v Speaker 2>seeing teens coming out with the guidance sort of put

0:01:14.080 --> 0:01:16.800
<v Speaker 2>it right in front of us. So first they're going

0:01:16.880 --> 0:01:21.559
<v Speaker 2>to have to show stability, either SATIN or other health

0:01:21.600 --> 0:01:26.800
<v Speaker 2>insurance companies will have to show some sort of stabilizing trends.

0:01:26.840 --> 0:01:31.280
<v Speaker 2>As a reminder, seeing Keen's guidance withdrawal comes approximately two

0:01:31.319 --> 0:01:36.360
<v Speaker 2>months after United withdrew its guidance, which created a very

0:01:36.400 --> 0:01:38.880
<v Speaker 2>negative sentiment for the whole group. And now it's the

0:01:38.920 --> 0:01:45.039
<v Speaker 2>second punch within the same larger health insurance industry. So

0:01:45.280 --> 0:01:48.320
<v Speaker 2>first thing is stability, and second thing, obviously there's going

0:01:48.400 --> 0:01:52.280
<v Speaker 2>to be a long term overhang from whatever reconciliation bill

0:01:52.440 --> 0:01:58.440
<v Speaker 2>brings to mitigate cuts overall, and just in general uncertainty

0:01:58.840 --> 0:02:01.440
<v Speaker 2>until visions are implemented.

0:02:01.560 --> 0:02:04.240
<v Speaker 1>All right, So here's Bloomberg News reporting Senteen is the

0:02:04.280 --> 0:02:07.120
<v Speaker 1>top seller of ACA health plans. The government has been

0:02:07.160 --> 0:02:10.600
<v Speaker 1>cracking down on inappropriate and fraudulent enrollments in those plans,

0:02:10.639 --> 0:02:13.440
<v Speaker 1>meaning people who shouldn't have been on them are getting

0:02:13.720 --> 0:02:17.720
<v Speaker 1>kicked off. Analysts have said that probably means customers who

0:02:17.720 --> 0:02:19.800
<v Speaker 1>are paying into them but not filing many claims are

0:02:19.800 --> 0:02:20.519
<v Speaker 1>now exiting.

0:02:21.360 --> 0:02:21.880
<v Speaker 2>How did the.

0:02:21.800 --> 0:02:24.880
<v Speaker 1>Company not know this? They're an insurance company, their job

0:02:24.960 --> 0:02:27.720
<v Speaker 1>is to price risk. How did they get so blinded?

0:02:28.600 --> 0:02:31.400
<v Speaker 2>It's very difficult to sort of where we are to

0:02:31.600 --> 0:02:36.840
<v Speaker 2>really fold a company, we're not in the trenches. Obviously,

0:02:36.960 --> 0:02:40.800
<v Speaker 2>it's their business. They should be able to sort of

0:02:40.919 --> 0:02:44.480
<v Speaker 2>foresee what's coming up in the next year and how

0:02:44.560 --> 0:02:47.040
<v Speaker 2>to manage risk. But at the same time, there are

0:02:47.040 --> 0:02:54.600
<v Speaker 2>so many things from Washington and policy changes on how

0:02:54.800 --> 0:02:59.240
<v Speaker 2>sick the patients are, and they manage thousands, if not

0:02:59.400 --> 0:03:02.840
<v Speaker 2>millions of people. Some of the things that may be

0:03:03.000 --> 0:03:06.800
<v Speaker 2>overlooked or may not just be presented sort of to

0:03:06.919 --> 0:03:11.200
<v Speaker 2>be really included in their trend and risk calculations.

0:03:11.760 --> 0:03:15.320
<v Speaker 3>So you mentioned United Health of course senteen today, so

0:03:15.360 --> 0:03:18.359
<v Speaker 3>these aren't necessarily isolated at least that's how the street

0:03:18.480 --> 0:03:21.360
<v Speaker 3>is viewing it. This is potentially an impact that people

0:03:21.360 --> 0:03:23.840
<v Speaker 3>could see ricocheting throughout the entire sector.

0:03:24.480 --> 0:03:28.520
<v Speaker 2>Yes, so in general, these companies, you know, as I said,

0:03:28.600 --> 0:03:32.640
<v Speaker 2>Sin King's focusing on marketplace and medigate, United is just

0:03:32.960 --> 0:03:36.640
<v Speaker 2>an eight hundred pound guerrilla focusing or has a huge

0:03:37.280 --> 0:03:41.120
<v Speaker 2>market in all of the health insurance businesses. But that

0:03:41.280 --> 0:03:46.120
<v Speaker 2>being set, in general, health insurance are trading as it's

0:03:46.160 --> 0:03:50.560
<v Speaker 2>a commoditized industry, so they're all generally trade in the

0:03:50.600 --> 0:03:53.400
<v Speaker 2>same direction. So if United, for example, I'm not saying

0:03:53.440 --> 0:03:56.400
<v Speaker 2>it they will do. But if United, for example, being

0:03:56.480 --> 0:04:01.560
<v Speaker 2>states guidance during the second quarter earning release, it will

0:04:01.600 --> 0:04:06.800
<v Speaker 2>create a stabilization effect for the whole industry. After that,

0:04:07.040 --> 0:04:11.280
<v Speaker 2>if someone like United or elevens, the larger players show

0:04:11.440 --> 0:04:15.560
<v Speaker 2>some stability or actually improvement in the operating environment and

0:04:15.720 --> 0:04:20.560
<v Speaker 2>the results that they report, it will impact the whole

0:04:20.600 --> 0:04:24.800
<v Speaker 2>industry and the positive. So generally it's you know, something

0:04:24.839 --> 0:04:27.800
<v Speaker 2>wrong with the one company, especially if someone is because United,

0:04:27.839 --> 0:04:28.920
<v Speaker 2>it impacts everyone else.

0:04:29.000 --> 0:04:31.040
<v Speaker 1>All right, So this is a function of the Trump

0:04:31.040 --> 0:04:34.400
<v Speaker 1>administration cracking down on some of these Affordable Care Act plans.

0:04:34.440 --> 0:04:36.000
<v Speaker 1>Is that kind of the origination of this?

0:04:36.560 --> 0:04:41.159
<v Speaker 2>I don't think so. No, okay, but that you know

0:04:41.440 --> 0:04:47.119
<v Speaker 2>Washington overhang, and usually it's a negative overhang, either Republicans

0:04:47.200 --> 0:04:51.839
<v Speaker 2>are leading in Washington or Democrats. It's always for health insurance,

0:04:52.040 --> 0:04:59.120
<v Speaker 2>it's generally in negative went from Washington. So that is

0:04:59.160 --> 0:05:02.919
<v Speaker 2>still you know, Washington cracking, uh, cracking on sort of

0:05:03.200 --> 0:05:06.360
<v Speaker 2>health insurance in general. There's always a in the back

0:05:06.480 --> 0:05:08.840
<v Speaker 1>Background, all right, Glenn, thanks so much for joining us

0:05:08.839 --> 0:05:11.159
<v Speaker 1>breaking this down forst Glenn also have senior healthcare analyst

0:05:11.200 --> 0:05:12.719
<v Speaker 1>for a Bloomberg Intelligence