Jefferies says Medicare benefit cuts to improve UnitedHealth's margins
** Brokerage Jefferies says data on Medicare Advantage bids for 2025 shows that health insurer UnitedHealth's UNH.N plans to cut benefits in these plans, which should improve its margins
** Says 2025 benefit cuts could lead to stable-to-higher margin for UNH next year due to an increase in the number of people enrolling in their plans
** Centers for Medicare and Medicaid Services said on Friday average premiums are projected to slightly decline in both Medicare's prescription drug program and Medicare Advantage plans from 2024 to 2025
** Jefferies says the benefit reductions were mostly by increasing drug deductibles
** Adds bids from peers CVS CVS.N, Humana HUM.N and Centene CNC.N also look conservative, meaning they are lower, but Elevance's ELV.N "less so"
** Health insurers have leaned on benefit reductions to improve margins, at least two Wall Street analysts said
** Insurers have been grappling with high medical costs and lower-than-expected payments from the government for managing healthcare, which have hurt their margins
** ELV up ~9.5%, UNH up 11%, CNC down ~2%, CVS down ~20%, HUM down ~29% YTD
Reporting by Sriparna Roy in Bengaluru
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