00:00I guess we have to go back to January when it looked like that number was going to be zero.
00:04What happened? It did look like the number was going to be zero. The Trump administration has
00:10really been dialed in on getting health care costs under control in the United States. And one of the
00:15ways that they were going to do that in terms of the budget was to not increase the amount it
00:19paid
00:20for these private insurance plans called Medicare Advantage. Millions of Americans use these plans
00:26in order to get their health care. And the government was going to stop increasing the
00:31amount that they pay them every year. This is trillions of dollars. And what happened was there
00:37was a huge sell off. The company said, look, we're not really going to be involved in this space if
00:42you are going to cut how much money we make so much, because, of course, costs have increased.
00:47So companies were pulling back. Americans were getting concerned about it. And the government
00:52caved. They're going to increase that rate by 2.48 percent in 2027. A huge boon for investors.
01:00But I am just curious, though, too. It did seem like we were supposed to come in. I mean,
01:04what was it last year? It's 2020. Was it like closer to 6 percent or something? So this is still
01:08a significant drop. It is still a significant drop. But, of course, it's all about expectations,
01:14how much investors had thought that there was going to be the amount that was going to increase over
01:20the coming years. In January, they said it was going to be flat. Investors said, look,
01:26just give us 1 percent or 1.5 percent. And in fact, the government came in at 2.48. So
01:31just much
01:32better than what the expectation was. Talk to us about the actual implications of this with
01:37the pay of 2.48 percent. It's really a meaningful improvement. What are you expecting in the immediate
01:43aftermath? It is an immediate improvement. It's so interesting because, in fact, a number of companies
01:49have said that they were going to get out of this space. So we see different companies that are
01:54going to benefit because they stayed in. We see United Health is going through the roof today.
01:59Humana is benefiting CVS. All of these big insurance companies that are still in this Medicare
02:05Advantage space. So we know that we're going to continue to see them reaping gains month over month,
02:13year over year for at least the foreseeable future. We'll see what happens in the out years if the
02:19administration does come back. Chris Klomp, who is the one who is running a lot of the CMS programs
02:25now, has said that he really does expect and want these Medicare Advantage programs to start dialing
02:32back their costs. And he's going to expect that. But if they do it too quickly, then the companies are
02:37going to pull out.
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