Shares of Cigna Corp. and other major health insurers slid deeper than the broader market Thursday, as investors remain nervous about health care reform's impact on the sector.
Managed care stocks have gone through spurts of volatility for more than a year now, as Congress debated and then passed a reform bill that aims to cover millions of uninsured people and also places new taxes and restrictions on insurers.
"I think the sector has probably just been more volatile overall," said Morningstar analyst Matthew Coffina. "They're somewhat more exposed to market fluctuations."
The reform bill passed in March, but many details remain unfinished, and that uncertainty worries some investors. Of particular concern are the unresolved details of a new guideline that starts next year and requires insurers to spend a certain percentage of the premiums they collect on medical costs.
Edward Jones analyst Steve Shubitz said he expects the stocks to act skittish at least until those regulations are finalized, possibly in the next month or two.
Wednesday afternoon, WellPoint Inc. said its California subsidiary, Anthem Blue Cross, will dial down rate hikes for individual insurance customers that drew national criticism earlier this year.
Anthem withdrew its original rate increase after state regulators said an independent review found mistakes. Those increases had sparked criticism from President Barack Obama and calls for tighter regulation.
Wednesday's news may be fueling a fear among investors that states could become more aggressive in monitoring insurance rates, Shubitz said.
Cigna shares dropped $1.20, or 3.9 percent, to $29.86, while the Standard & Poor's 500 index fell less than 1 percent.
Cigna's liabilities tend to rise when financial markets perform poorly due to exposure through its life insurance business and underfunded pension, among other factors.
"They're just much more levered than everybody else," Coffina said.
WellPoint dropped $1.14, or 2.3 percent, to $47.79; Humana Inc. fell $1.08, or 2.4 percent, to $44.59; UnitedHealth Group Inc. was down 55 cents to $27.85; and Aetna Inc. fell 39 cents to $25.99.