Health Insurers' Earnings Surge Stocks Amid Cost Control Efforts

Health insurance companies have reported strong earnings in recent quarters, leading to a surge in stock prices. UnitedHealth Group, the parent of the nation's largest health insurer UnitedHealthcare, posted net income of more than $5 billion in the second quarter. This comes as the company's medical care ratio fell to 86.7% compared to 89.4% in the same period last year.

The medical care ratio is the percentage of premium revenue that goes toward medical costs. UnitedHealth Group attributed the decrease to benefit design and pricing discipline, member mix, and medical cost management initiatives.

Shares of UnitedHealth have risen more than 30% compared to a year ago, trading near $400 this week. CVS Health, which owns Aetna, has also seen its stock price increase by over 30% since last summer.

Other health insurers, including Centene and Humana, have reported significant gains in their stock prices as well. Centene's shares have more than doubled in the last year, while Humana's stock is trading at over $380 a share this week.