America’s five largest publicly traded health insurers (according to a 2018 Forbes list) have seen their combined market value plummet by $64 billion in roughly one week.
Coincidentally, Senator Bernie Sanders (I-Vermont) rolled out his Medicare for All bill one week ago, which would eliminate private health insurers and replace the for-profit healthcare system with a government-funded, single-payer system. If Sanders’ bill became law, the Medicare for All system would completely cover all primary care, hospital visits, and prescription drugs for all Americans. All premiums, deductibles, and copays would be replaced with a slight increase in taxes that Sanders says would amount to a significant overall cost savings for the vast majority of households.
As CNBC reported Wednesday, UnitedHealth has seen its stock price drop precipitously in the last week, going from $246.03 per share on April 10 to just $216.84 as of 4:25 PM on April 17. This marks a drop of approximately 12%, an overall decline of $35 billion in market cap, and a 52-week low in trading.
Other private health insurance companies saw similar declines, but none quite as steep as UnitedHealth’s. Anthem’s stock dropped from $288.04 per share to $236.25 per share over that same time period — a $14 billion drop. Cigna’s stock price fell from $168.20 to $145.49, losing $8 billion in market cap. Health insurer Humana has also seen a significant drop in its share price in the last week, going from $266.50 per share to $232.89 on Wednesday, reflecting a drop of approximately $4 billion in market cap. Centene is currently trading at just $47.01, despite trading for $57.29 a week ago. That’s a drop in market cap of roughly $3.5 billion.
Hedge fund manager Michael Binger told CNBC that the reason for health insurers like UnitedHealth losing so much value was due to “political noise,” likely referring to the national Medicare for All conversation.
UnitedHealth itself is one of the biggest opponents of Medicare for All. In a recent call with investors, CEO David Wichmann said the proposal pushed by Rep. Pramila Jayapal (D-Washington) in the House and by Sanders in the Senate would “destabilize the nation’s health system.”
“[Medicare for All would] surely jeopardize the relationship people have with their doctors, destabilize the nation’s health system and limit the ability of clinicians to practice medicine at their best,” Wichmann told investors. “And the inherent cost burden would surely have a severe impact on the economy and jobs — all without fundamentally increasing access to care.”
According to information from UnitedHealth Group’s proxy statement, Wichmann made more than $17 million in total compensation for the fiscal year ending in 2017. That’s approximately 289 times more than the median salary for its employees ($58,378/year). More than $8 million of that money was paid in the form of stock, meaning Wichmann has personally seen his net worth drop by potentially millions of dollars in the last week. That drop may continue, as UnitedHealth is on course to post its worst month on the stock market in a decade.
The $64 billion drop in market cap for the five biggest health insurers, and in particular the $35 billion drop for UnitedHealth (which made $110 billion more in revenue and has nine million more enrollees than Anthem, its nearest competitor) in just the past week coincided with what may have been Sen. Sanders best week yet since launching his 2020 presidential campaign. An Emerson poll released earlier this week showed Sanders had leapt to the #1 position among 19 other current and prospective candidates, ranking five points ahead of former Vice President Joe Biden, who ranked second.
Sanders also got a surprisingly warm reception at a Fox News town hall this week, including the crowd clapping and cheering when moderator Bret Baier asked if they would switch from their current employer-provided care to Sanders’ Medicare for All system if given the chance.
Carl Gibson is a politics contributor for Grit Post. His work has previously been published in The Guardian, The Washington Post, The Houston Chronicle, Al-Jazeera America, and NPR, among others. Follow him on Twitter @crgibs or send him an email at carl at gritpost dot com.