Health Insurers Can't Catch a Break as Earnings Come Into Focus

(Bloomberg) -- A quiet August in Washington D.C. hasn’t eased concerns about the managed-care sector as analysts are getting increasingly worried about fundamentals and not just politics.

A July hospital survey from JPMorgan last week has heightened concerns about insurers’ spending on patients’ medical claims in the third quarter. Anthem Inc., UnitedHealth Group Inc. and Centene Corp. were among the companies that flagged rising costs in the past quarter.

"The timing of this debate has been inconvenient given policy concerns have faded and the group would likely be trading better in the current macro backdrop," Goldman strategist Asad Haider wrote in a note. Instead, the sector "seems to have peaked" before UnitedHealth’s second-quarter results.

Fundamental concerns have weighed on the sector for the past month. The S&P 500 Managed Care Index has declined 5.2% this year, after being up about 8% just last month. The benchmark plunged nearly 3% after JPMorgan’s survey came out last week. The bank’s analyst Gary Taylor called the sell-off an "overreaction," but reiterated his caution for the group’s performance into year-end.

After a brief respite, investors’ attention will likely turn back to politics soon, as the next round of Democratic debates is scheduled for September.

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