BCBS-NC Files For Rate Increases

Deutsche Bank has issued an industry alert report on the Managed Care sector rate filings published by Blue Cross Blue Shield of North Carolina (BCBS-NC).

This report was submitted by BCBS-NC to the NC Department of Insurance for plan effective January 1, 2011, when some of the initial health care reforms go into effect. BCBS-NC has filed for rate increases that will affect 300,000 individuals in North Carolina, 70% of which will see increases below 10% including 28,000 who will see decreases.

The Blue Advantage plan will increase by 6.97% and the Blue Option HSA plan by only 2.06%, rates at their lowest since 2007. Premiums are likely to increase in 2014 when health care reform eliminates underwriting.

Focus stocks include:

Aetna (NYSE: AET) Buy, $35 price target, $27.15

AmeriGroup (NYSE: AGP) Buy, $43 price target, $38.14

CIGNA (NYSE: CI) Hold, $40 price target, $32.72

Centene (NYSE: CNC) Hold, $24 price target, $20.72

Coventry Health Care (NYSE: CVH) Hold, $23 price target, $20.01

eHealth (NASDAQ: EHTH) Hold, $13 price target, $9.85

Health Net (NYSE: HNT) Hold, $26 price target, $23.29

HealthSpring (NYSE: HS) Hold, $20 price target, $18.27

Humana (NYSE: HUM) Hold, $48 price target, $48.50

Healthways, Inc. (NASDAQ: HWAY) Hold, $15 price target, $13.04

Magellan Health (NASDAQ: MGLN) Buy, $49 price target, $43.32

Molina (NYSE: MOH) Hold, $25 price target, $26.07

Universal American (NYSE: UAM) Hold, $16 price target, $13.91

UnitedHealth Group (NYSE: UNH) Hold, $36 price target, $31.50

WellCare Health Plans (NYSE: WCG) Hold, $25 price target, $25.12

WellPoint (NYSE: WLP) Buy, $68 price target, $49.64