Health insurer stocks see sharper fall than market

The largest health insurers saw their stock fall anywhere from nearly 4 percent to more than 7 percent during afternoon trading.

Cigna Corp. took the biggest fall, with its shares dropping more than 7 percent, or $1.14, to $13.91. UnitedHealth Group Inc. shares fell 7 percent, or $1.50,to $19.94; WellPoint Inc. fell nearly 6 percent, or $2.18, to $35.71; Aetna Inc. fell 5 percent, or $1.27, to $22.43.

Humana Inc. fared the best of the big insurers, with its shares falling nearly 4 percent, or $1.32, to $33.90.

Overall, the Dow Jones industrial average tumbled 2.78 percent, the Standard & Poor's 500 index fell nearly 3 percent, and the Nasdaq composite index dropped 2.61 percent.

The steeper drop in managed care puzzled Stifel Nicolaus analyst Tom Carroll, who saw no easy explanation. He noted the Centers for Medicare and Medicaid Services has amended a rule about paying commissions to brokers who sell Medicare Advantage products.

He said that may be viewed as "a first level of increased regulation in what could be a new world in the Medicare Advantage program." But he said he wasn't sure if that affected the sector Tuesday.

"My phone has been very quiet," he said. "I have not heard from anybody."

Medicare Advantage plans generally offer more benefits than Medicare. They are largely financed by the federal government and run by private insurers.

A Nov. 10 note from Citigroup analyst Charles Boorady said a survey of 30 health insurance brokers showed that 23 percent believed insurers were raising premiums at a faster rate for next year than they did for this year. A total of 15 percent saw a slower increase, and 27 percent said they weren't sure.