Preliminary 2010 Medicare Advantage Rates Released

After the market close Friday, the Centers for Medicare & Medicaid Services released its preliminary outlook for 2010 Medicare Advantage (MA) payment rates. Proposed rate increases clearly did not meet the market's expectations, sending stock prices of managed-care organizations (MCOs) plunging Monday. Medicare-focused MCOs were the hardest hit, with Humana HUM and HealthSpring HS both down more than 20% in the morning. Five-star-rated UnitedHealth UNH, which has a significant Medicare presence, was also down more than 13%, but even companies with relatively little Medicare exposure, like Aetna AET, are being punished.