AMERIGROUP Shares Plunged: What You Need to Know


Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Managed health care provider AMERIGROUP (NYS: AGP) had an unhealthy day today, dropping 12% in intraday trading today after Medicare cuts were announced late Friday.

So what: Late Friday, Medicare announced an 11% reduction in rates for its skilled nursing facilities, effective next fiscal year. The Centers for Medicare & Medicaid Services also said there was an unexpected increase in nursing home payments this fiscal year.

Now what: A hoped-for 1.5% funding increase for skilled nursing facilities is now off the table. Stocks of Humana (NYS: HUM) , WellCare Health Plans (NYS: WCG) , UnitedHealth Group (NYS: UNH) , WellPoint (NYSE WLP), Aetna (NYSE AET), and Cigna (NYS: CI) are also ailing today. The sell-off follows on the heels of another big plunge last Friday, after AMERIGROUP reported disappointing earnings.

Interested in more info on AMERIGROUP? Add it to your watchlist byclicking here.

At the time thisarticle was published Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.