Medicare Advantage Rates Remain Consistent, Health Insurers Tumble

On Monday, the stock prices of several health insurers fluctuated in response to the Biden Administration’s announcement regarding Medicare Advantage rates for 2025. UnitedHealth (UNH) and Humana (HUM) experienced a decline in their stock prices, while other insurers like CVS Health (CVS) and Cigna (CI) saw mixed results.

In January, the Centers for Medicare and Medicaid Services (CMS) proposed that private Medicare Advantage rates would increase by an average of 3.7% in 2025. However, on Monday, CMS announced that these rates would remain consistent with their initial proposal. This news was a blow to UnitedHealth and Humana, both of which are major players in the Medicare Advantage market.

UnitedHealth’s stock dropped by 4.8% after the announcement, while Humana’s stock fell by 9.6% in after-hours trading, putting it at risk of reaching a four-year low. CVS Health also experienced a decline in its stock price, falling by 5.1% overnight. Meanwhile, Cigna experienced a more modest decline of 1.3%.

Smaller insurers like Centene and Molina Healthcare also felt the impact of this news, experiencing declines of 2.9% and 2.3%, respectively. Elevance Health slumped by 4.1%, despite being near a 52-week high just days before the announcement was made.

This news has prompted some investors to reevaluate their holdings in health insurance companies and consider alternative investment options or adjusting their portfolios accordingly.

As always, it is important for investors to stay informed about industry developments and make informed decisions based on reliable sources and analysis.

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