Wall Street Fears a Health Insurer Meltdown Is Far From Over (1)

The tide of US government money that has been pouring into health insurers for decades is reversing more abruptly than expected, putting strategies that drove profit growth for years in doubt.

Elevance Health Inc.’s earnings on Thursday were the latest blow. The company slashed its profit outlook after struggling to contain higher medical costs in Affordable Care Act plans and lagging reimbursements from Medicaid safety net plans for the poor.

Setbacks in government health programs are hitting the entire industry, prompting Elevance, UnitedHealth Group Inc., Centene Corp. and Molina Healthcare Inc. to warn of worsening outlooks. The four ...