• Thu. Apr 25th, 2024

Insurance Stocks Plummet After Medicare Advantage Payment Announcement: The Latest Challenge for Health Insurers

BySamantha Nguyen

Apr 2, 2024
Health insurer stocks take a hit as Medicare Advantage rates fall short of expectations

On Monday, the Centers for Medicare and Medicaid Services (CMS) announced that government payments to Medicare Advantage plans would increase by 3.7% year over year, which is lower than what was expected. This news put additional pressure on health insurers that are already facing high medical costs and challenges following a cyberattack on UnitedHealth Group’s tech unit.

As a result of this decision, shares of U.S. health insurers saw a decline on Tuesday, particularly affecting companies that heavily rely on private Medicare plans such as CVS Health, UnitedHealth Group, Elevance Health, Centene, and Humana. Humana was hit particularly hard as it generates the majority of its revenue from private Medicare plans, also known as Medicare Advantage.

The Medicare Advantage business has traditionally been a source of growth and profits for the insurance industry due to its lower monthly premiums and added benefits not covered by traditional Medicare. However, with the current rate remaining unchanged from an earlier proposal in January, this announcement has added to the challenges faced by insurers in the industry. The federal agency usually increases the rate after the initial proposal, so this move is not typical and has added uncertainty for insurers moving forward.

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