Is the impact of the US health insurance pricing overestimated? Cantor Fitzgerald: Market reaction is excessive, US medical insurance stocks are now presenting a good buying opportunity.

Due to the disruption of the pricing system of the Federal Medicare Advantage Plan, the US stock medical insurance sector has fallen into a slump, but Cantor Fitzgerald analyst Sarah James believes that this is a great time to buy on the dip. In an interview, James said, "I think this is another great buying opportunity." She pointed out that the pricing of the Federal Medicare Advantage Plan is reassessed every year, and the current selling wave in the sector is causing multiple stocks in the industry to be mispriced. She further analyzed that the weakness in the health insurance sector is rooted in the fact that the pricing levels of the plan in the past few years have not been sufficient to cover the medical costs of the elderly population. The market originally expected the pricing and costs to match and improve by 2027, however, the US Federal Medicare and Medicaid Services Center has instead implemented new bearish policies. James bluntly stated that the accuracy of these policies is "questionable at best." James believes that the stock market has made an "unreasonable allocation reaction" to the challenges of the Federal Medicare Advantage Plan. While companies like HUM.US that heavily rely on the plan are indeed facing substantial headwinds James rates them as "hold" she noted that health insurance companies with sustainable pricing strategies and diverse business operations are unfairly being sold off by the market. James maintains a "buy" rating for UnitedHealth Group Incorporated (UNH.US) and CVS Health Corporation (CVS.US), believing that these two companies should not be dragged down by the overall weakness of the sector. Regarding UnitedHealth Group Incorporated, James is confident in the company's recent financial performance. She praised the company's experienced management team for setting conservative performance guidelines, laying the foundation for the company to consistently "outperform and raise expectations," while also managing medical costs relatively well. James has set a target price for the company that is over 30% higher than the current stock price, making it attractive for both short-term and long-term investors. Despite the increased regulatory scrutiny on health insurance payment providers by the US government, bringing new policy headwinds, including controversies over medical coding accuracy and potential fraud investigations, James remains optimistic about the long-term prospects of the industry. She pointed out that after the election, the US political landscape is likely to be deadlocked, and the period of reduced regulatory policy changes is usually a golden period for the development of health insurance payment providers. Therefore, the current moment may be a favorable opportunity to reposition these leading health insurance stocks.