Shares of health insurance benefits managers dropped last Wednesday after the largest member of their industry, UnitedHealth Group (UNH 0.30%), issued a minor warning. Speaking at an investor conference, one of the company's executives said the company was seeing an uptick in seniors who are undergoing elective surgeries that they had delayed during the pandemic.

According to management, knee and hip replacements making a surprisingly strong comeback this year. As a result, second-quarter earnings could be affected.

Short-term-minded investment bank analysts responded to the admission by cutting their price targets on UnitedHealth Group and related insurance stocks like CVS Health (CVS -0.22%), which owns Aetna.

If you buy dividend stocks expecting to draw income from them throughout your retirement years, buying CVS Health and UnitedHealth Group's beaten-down stocks right now could be a great idea. Here's why.

The molehill that became a mountain for health insurance stocks 

During the latest Goldman Sachs Healthcare Conference, investment bank analysts heard UnitedHealth Group CFO John Rex say his company's medical benefit ratio (MBR) could be a little higher than previously expected. Specifically, he said it could exceed the upper bound of the full-year outlook that the company issued last November during the second quarter.

UnitedHealth Group removed the "Data Elements" section from its latest investor day presentation, so there weren't many investors who realized what a minor statement he made. Last November, UnitedHealth Group guided its MBR for 2023 to a range between 82.1% and 83.1%.

Since the Affordable Care Act became law in 2010, health insurers have had to spend at least 80% of the premiums they collect on medical expenses. If UnitedHealth Group's MBR comes in slightly above the upper end of its guided range this year, the company is still doing a great job of managing costs.

UnitedHealth isn't the only insurer noticing an uptick in outpatient expenses related to knee and hip replacements. CVS Health's MBR climbed slightly to 84.6% in the first quarter. For the full year, the company expects its MBR to land between 84.2% and 85.2%, which isn't a rate that investors need to worry about.

Managing costs won't be a problem

While there's a chance that pent-up demand for elective surgeries drives up expenses this year, it's hardly a reason for long-term investors to avoid CVS Health or UnitedHealth Group stock. Immediately after Rex made his comment about rising expenses in the second quarter, the CEO of UnitedHealthcare Medicare & Retirement, Timothy John Noel, reminded investors that the company can easily adjust for the extra expense by raising premiums in 2024.

Raising premiums isn't the only thing CVS Health and UnitedHealth Group can do to improve profitability. Recent acquisitions of primary-care providers will give these companies some powerful medical expense management tools. 

Last year, UnitedHealth could boast that it had 70,000 employed or aligned physicians, and its ability to provide the benefits it's also paid to manage is only getting stronger. In February, it acquired LHC Group, an organization with 30,000 employees who provide more than 12 million home health visits annually.

In March, CVS Health acquired Signify Health, a network of more than 10,000 clinicians who provide millions of in-home visits annually. As the largest providers of the benefits that they're also paid to manage, controlling costs over the long run should be a breeze for both of these companies.

Passive-income powerhouses

CVS Health offers a 3.6% yield at recent prices, and the payout is rising fast. The company paused dividend raises for a few years following its acquisition of Aetna, but it's ready to make up for lost time. It's increased its payout by 21% over the past two years.

Despite two years of rapid raises, CVS Health needed just 17% of the free cash flow its operations generated over the past year to meet its dividend commitment. This gives it lots of room to make big payout bumps over the next several years.

UnitedHealth Group offers a far less attractive 1.6% yield at the moment, but this payout has more than doubled over the past five years. Profits are rising so fast that the company needed just 18% of trailing free cash flow to pay its dividend.

UnitedHealth Group expects earnings growth at a rate between 13% and 16% annually over the long run. With a well-funded dividend program, investors can expect their payouts to rise at a similar pace. Adding shares of this stock and CVS Health to your portfolio could lead to huge passive income streams in your retirement years.