Health Net outlines commercial health cost expectations The company expects the year-over-year change in commercial health care costs PMPM to be driven by several factors. The company anticipates no recurrence of adverse prior period development in 2013, which accounts for approximately 200 basis points of the change noted above. The continuing mix shift from larger to smaller groups, from higher cost to lower cost geographies, and from full network products to more efficient products with lower medical care ratios, is expected to account for approximately 90 basis points of the difference. Lastly, approximately 60 basis points of the difference are expected to result from repricing actions in the company’s largest accounts.
Health Net downgraded to Sell from Buy at Citigroup Citigroup downgraded Health Net two notches to Sell from Buy citing the stock's 60% year-to-date rally and its belief that 2015 consensus estimates are too high. Citi thinks the company's dual enrollment in California is tracking well short of projections. It raised its price target for shares to $42 from $35.