United Health Group Shares Surge Higher On New Transparency Rule

Shares of United Health Group surged higher by 6.2% Friday afternoon after President Trump unveiled details behind the push to increase transparency behind health care costs.

The news was a new rule that will require hospitals to disclose the discounted prices they’ve negotiated with insurers. The rule isn’t due to be implemented until 2021, and is expected to face legal challenges in the coming year.

The rule will also require hospitals to reveal their standard charges for service and the discounted price a hospital would accept directly from a patient paid in cash, among other measures.

Trump said in a speech from the White House that the rule is meant to give Americans “control over their health-care decisions.”

The fact that United Health Group shares are rallying so strongly in response to the news means insurers aren’t very scared of the rule. There is also a $300 per day penalty for hospitals that don’t comply, but analysts agree the penalty won’t cause much pain to most hospitals.

Insurers also commented that the rule isn’t likely to be effective in reducing health-care costs in America.

Following Friday’s rally shares of United Health Group are now up by 8.5% since the start of the year, which is slightly worse than the 12.5% gain for the S&P 500 Health Care Sector in the same time frame.

Health care remains a top priority for President Trump, and for voters as we head into the beginning of 2022 campaigning. This is likely to bring more changes for the industry, including some which are sure to be negative for insurers.