An Insurance Crackdown Warning Shot

An Insurance Crackdown Warning Shot

Bloomberg is reporting that insurance company Cigna is making big changes regarding coverage for Myriad Genetics breast-cancer-related diagnostic test. This was at the center of both the political media, thanks to a Supreme Court verdict vacating some of Myriad's patents, and the paparazzi, after actress Angelina Jolie received a double mastectomy after showing an extremely high predisposition of developing breast cancer.

Cigna will require a genetic counselor before paying for a BRCA diagnostic test. These tests are for women who have a history of breast cancer in their families, but there are concerns regarding over-prescription and Cigna believes that a counselor can help wade through the implications of the data.

This follows last year's decision by Aetna to limit coverage on Questcor's Achhar for certain lucrative indications. While isolated events, this could be the beginning of a larger trend by managed-care companies reacting against certain expensive tests and treatments in orphan diseases and oncology.

In this video, health-care analyst David Williamson discusses what these events mean for investors in Cigna and Myriad, but also examines the broader issue of insurance stocks cracking down on expensive treatments, and where that could disrupt health-care spending in the future.

Rising health-care costs continue to be a hotly debated topic, and even legendary investor Warren Buffett called this trend, "The tapeworm that's eating at American competitiveness." To learn more about what's happening to the health-care system -- and how to potentially profit from this trend -- click here for free, immediate access.

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