Medicaid insurers slip as Trump administration pauses assistance program payouts

In a memo dated January 27 from Matthew Vaeth, Acting Director, Office of Management and Budget, sent to the heads of the federal government’s executive departments and agencies, the acting director stated in part: “The American people elected Donald J. Trump to be President of the United States and gave him a mandate to increase the impact of every federal taxpayer dollar… This memorandum requires Federal agencies to identify and review all Federal financial assistance programs and supporting activities consistent with the President’s policies and requirements… To implement these orders, each agency must complete a comprehensive analysis of all of their Federal financial assistance programs to identify programs, projects, and activities that may be implicated by any of the President’s executive orders. In the interim, to the extent permissible under applicable law, Federal agencies must temporarily pause all activities related to obligation or disbursement of all Federal financial assistance, and other relevant agency activities that may be implicated by the executive orders.” A memo footnote explicitly stated that “Nothing in this memo should be construed to impact Medicare or Social Security benefits,” but did not call out Medicaid. Molina Healthcare (MOH), Elevance Health (ELV) and Centene (CNC), which are all levered to Medicaid coverage, are lower in Tuesday afternoon trading. Other publicly traded companies in the healthcare insurance space that may be impacted by changes to Medicaid policy include CVS Health (CVS), Cigna (CI), Humana (HUM) and UnitedHealth (UNH).