2 Healthcare Recession-Resistant Stocks Unaffected by Tariffs

Core Insights - The medical sector, particularly health insurance carriers, faced significant challenges in 2024 due to rising utilization costs associated with Medicare Advantage (MA) plans, which negatively impacted profits [1][2] - Despite the difficulties in 2024, health insurers are expected to perform well in 2025, benefiting from tariff-free status and recession resistance [2][3] Humana Inc. - Humana, the second-largest Medicare Advantage plan provider, experienced a stock decline of 46% in 2024, closing at $253.70 on December 31, 2024, but has seen an 11.3$2.16 in Q4 2024, although revenues rose 10.4% year-over-year to $29.21 billion, surpassing consensus estimates [7] - Humana's adjusted benefits ratio increased by 120 basis points year-over-year to 91.9$26 billion for MA plan providers, with Humana set to benefit significantly [5][6] - However, Humana faces potential penalties of up to $2 billion due to a drop in Star Ratings, which could reduce net MA revenues to$3.4 billion [6][8] CVS Health - CVS Health has shown a turnaround, with stock prices increasing by 54% year-to-date as of April 14, 2025, and operates a more diversified business model compared to Humana [10][12] - The company reported an EPS of $1.19 in Q4 2024, beating consensus estimates, with revenues rising 4.2$97.71 billion [13] - CVS Health's MA membership is expected to decline by high-single digits in unprofitable regions, but the 5.06% reimbursement rate increase could lead to an estimated $3 billion increase in 2026 reimbursements [12][17] - The Health Care Benefits segment reported an adjusted operating loss of$439 million, primarily due to higher MA utilization and lowered Star Ratings [13][14] - CVS Health's management aims to restore target margins of 3% to 5% in 2026, supported by the recent reimbursement increase [17]