Some insurers whose business is dependent on Medicaid funding fell hard on Monday, after the state of Ohio decided to change the insurers who manage Medicaid benefits for residents.
Ohio chose Aetna (AET), CareSource, Meridian Health Plan, Paramount Advantage and United Health Group (UNH) to administer the state’s Medicaid program, a big loss for Molina Healthcare (MOH) and Centene (CNC), which derive significant income from Ohio’s program. The two insurers fell 25% and 14% respectively in midday trading.
WellCare Health Plans (WCG) also fell 6.6% after losing access to the Ohio Medicaid market.
Aetna, meanwhile, was a “surprise winner” in the contract selection process, wrote Bernstein Research analyst Ana Gupte. “AET could see 1-2% EPS upside.”
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