Health Insurer Stocks Spooked as Trump Asks for Lower Premiums

President Donald Trump is pressuring health insurers to start cutting consumer prices. (Aaron Schwartz/CNP/Bloomberg)

Key Points

• Health-insurance stocks decline after President Donald Trump announced plans to meet with industry executives to lower consumer premiums.
• UnitedHealth Group’s stock initially falls nearly 10% but recovers to close with a 0.2% loss; other insurers also saw declines.
• The sector is sensitive to government pressure on pricing, as investors fear regulatory changes could impact insurer profits.

Health-insurance stocks slid during Friday trading—although many have recouped the losses— after President Donald Trump said he would summon industry executives and ask them to bring down the cost of premiums for consumers.

The president has already pressured many pharmaceutical executives to lower U.S. drug prices to match those in other developed countries and bring more manufacturing to the U.S.

At Friday’s news conference announcing the latest drug-pricing deals, Trump said he wants health insurers to “ease up and start cutting prices” as well. Trump said he would like the meeting to happen either next week in Florida or the beginning of January in Washington.

Stock in UnitedHealth Group , the bellwether among health insurers, tumbled nearly 10% around 3 p.m. Eastern Time, but later bounced back to close the day with just a 0.2% loss. Humana , Cigna Group , and Elevance Health stocks also declined 0.5%, 0.8%, and 1.1%, respectively.

Health-insurance stocks, led by UnitedHealth Group, already sold off sharply this year as premiums struggle to catch up with rising healthcare costs. After years of underuse, patients are coming back with more surgeries and outpatient procedures, pressuring insurer’s earnings.

Investors also feared that the government may change healthcare regulations in ways that could force insurers to pay more for patient care, which would hurt profits. Trump’s remarks on Friday was just the latest political rhetoric about lowering medical prices.

While Friday’s stock moves were minor, the message from the market was clear: Even the suggestion of government pressure is enough to rattle the sector that’s built on pricing power and predictability.

Write to Evie Liu at evie.liu@barrons.com