There are some positive nuggets in the story though... 1."The results continue a trend reported by other insurers, as consumers start to use health care services again after a year of putting off appointments." This could be a positive for MDF revenues, especially for it non risk insured portion.. 2.".. Humana said enrollment in its Medicare Advantage program climbed 16% year to date." ...Positive because these are the people that MDF Services and if that trend continues, it could point to higher patient numbers and of course revenues
One other note. MDF has a registration for 200M in securities..it's not clear what they are doing with that. This could be a drag if people think they are planning on flooding the market with shares. I suspect however, that they are trying to raise some cheap capital( everyone else is) to pay down the loans from the Continucare acquisition.
CNBC highlights the 2 key issues in HMOs..Looks like the market is lumping in MDF with this group..
Two major issues per CNBC
1) healthcare utilization is rising: after several years with fewer doctor visits, that trend is reversing. The Medical Loss Ratio (MLR) — the amount the HMOs are paying out as a percentage of the money they take in — has been rising.
2) the Supreme Court is set to rule on the Affordable Care Act on or about June 25. If they uphold the main provisions of the law, roughly 30 million more people will go into managed care — a plus for HMOs. But if it is struck down, many will remain uninsured, and they will miss the added growth opportunity.