Headlines about health care funds catching the flu have been no joke this week for investors.
This week the, biggest U.S. health insurer, UnitedHealth Group (UNH Quote), actually complained that higher-than-expected influenza rates may impact first quarter earnings.
The bottom dropped out for the sector, as UnitedHealth's competitors Humana(HUM Quote) and WellPoint(WLP Quote) cut their full-year forecasts. Two of the largest adverse factors for these companies are rate competition for market share to attract Medicare prescription-drug-plan patients and higher-than-expected medical costs.
A low-interest-rate environment is also a negative to insurance companies, especially as medical-cost inflation routinely outpaces broader measures. Insurers are earning less interest income on the securities they buy with your health-care premium money. ...
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