Humana, UnitedHealth plunge 20% after Trump administration proposes keeping Medicare Advantage rates flat
Shares of large Medicare plan providers Humana, CVS Health and UnitedHealth Group plunged in extended trading.
TL;DR
- Several large health-care companies saw their stock prices fall significantly on Tuesday.
- The decline followed a proposal by the Trump administration for nearly flat rates for Medicare Advantage insurers.
- Humana dropped over 20%, CVS Health shed 13%, and UnitedHealth Group lost more than 19%.
- The CMS proposed a net average payment increase of 0.09% for Medicare Advantage plans in 2027.
- This proposed increase is considerably lower than the 4% to 6% increase analysts had anticipated.
- The government payment rate influences insurers' monthly premiums, plan benefits, and profits.
- Medicare Advantage plans are privately run health insurance options contracted by Medicare, with over half of Medicare beneficiaries enrolled.
- CMS also aims to reform billing practices to improve payment accuracy and ensure adequate reimbursement.