• Tue. Apr 23rd, 2024

Insurance Companies Dismayed by 3.7% Hike in Medicare Payments; Humana, CVS Health, and Others Feeling the Impact

BySamantha Nguyen

Apr 2, 2024
Lower Medicare rates impact CVS, Humana, and other health stocks

On Tuesday, federal regulators announced that government payments to Medicare Advantage and Medicare Part D programs will increase by an average of 3.7% or $16 billion year-over-year in 2025. However, this news was not enough to boost the stocks of several health insurance companies, including Humana, CVS Health, UnitedHealth, and Elevance Health.

Humana, the nation’s second-largest Medicare Advantage health insurer, saw a 12% decrease in its stock on Tuesday morning. UnitedHealth stock fell by 6%, CVS Health shares slid by 8%, Centene Corp. stock fell by 5%, and Elevance Health stock dropped by 4%. The rate increase announced by CMS is the same as a rate proposal made in January, and over the past 10 years, final rates were not increased from their initial proposal only once.

During an investor call in March, Humana CFO Susan Diamond expressed disappointment in the rate increase, stating that it may be challenging for the company to reach its goal of boosting earnings by $6 to $10 without a bigger increase in payments. This news comes as other pharma companies face challenges such as the weight loss drug shortage affecting Eli Lily’s ZepboundOzempic and backlash over the low cost of producing the drug.

By Samantha Nguyen

As a content writer at newsqwe.com, I am passionate about crafting engaging and informative articles that captivate our audience. With a background in journalism and a keen eye for detail, I strive to deliver content that is not only well-researched but also adds value to our readers' lives. From breaking news stories to in-depth features, I take pride in my ability to tell compelling stories that resonate with our diverse audience. When I'm not typing away at my keyboard, you can find me exploring new cafes, practicing yoga, or getting lost in a good book. I am thrilled to be a part of the newsqwe.com team and look forward to sharing my love for writing with all of our readers.

Leave a Reply