Leading health insurer Cigna Group Inc. (NYSE: CI) was praised for having the foresight to divest its Medicare Advantage (MA) business before rising acute care utilization rates would impact its medical care ratio (MCR) or medical benefits ratio (MBR), which the percentage of medical premiums paid out for medical reimbursement claims.
MCR levels have surged for other MA plan providers like CVS Health Co. (NYSE: CVS) and Humana Inc. (NYSE: HUM). The medical sector leader posted its fourth quarter of 2024 earnings results, which triggered a 13% sell-off the following morning as its MCR surged to 87.9%, up from 82.2% last year. If one of the most efficient health insurers can’t keep a lid on its MCR, what does it mean for the rest of the health insurance industry?
