Health Stocks Take A Hit After Trump Administration Plan News

Benzinga

Health insurance stocks fell sharply after the Trump administration proposed keeping Medicare Advantage payment rates nearly flat for 2027, a move that caught Wall Street off guard.  The proposal from the Centers for Medicare & Medicaid Services outlines a net average payment increase of just 0.09% for Medicare Advantage plans, far below analyst expectations of a 4% to 6% increase. The news sent shares of Humana, CVS Health, UnitedHealth Group, and Elevance Health lower in after-hours trading.  Medicare Advantage plans cover more than half of all Medicare beneficiaries and play a major role in insurer profitability. Because government payment rates determine premiums, benefits, and margins, even small changes can have outsized effects on stock prices.  CMS says the proposal aims to improve payment accuracy and protect taxpayers, but investors are now recalibrating expectations ahead of final rate decisions expected in April.

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00:00Health insurance stocks just got hit hard, and it came straight from Washington.

00:04The Trump administration proposed keeping Medicare Advantage rates nearly flat next year.

00:09After hours, Humana dropped nearly 13%, CVS fell 9%, UnitedHealth lost almost 9%, and Elevant slid 5%.

00:18The proposal calls for just a 0.09% average payment increase in 2027.

00:24Wall Street was expecting 4-6%.

00:26These rates decide what insurers can charge, what benefits they offer, and how much profit they make.

00:31More than half of all Medicare beneficiaries are in these plans.

00:36When expectations collapse, stocks don't wait, and this proposal just reset the math.

00:41Which is exactly why...

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