April 14, 2024 3:01 pm
Health insurance company shares decline as last Medicare Advantage rates fall short – NBC Chicago

The recent decision by the Biden administration to not increase payments for private Medicare plans as much as anticipated has caused shares of U.S. health insurers to decline. This move puts additional pressure on insurers, who are already facing high medical costs and uncertainty following the ransomware attack on UnitedHealth Group’s tech unit. According to the Centers for Medicare and Medicaid Services, government payments to Medicare Advantage plans are only expected to rise by 3.7% year over year.

Following this announcement, several health insurers saw declines in their stock prices, including CVS Health whose shares fell over 8%, while UnitedHealth Group’s stock slid nearly 7%. Elevance Health and Centene also experienced stock declines of more than 3% and 6% respectively. Humana, which is heavily reliant on private Medicare plans, saw its stock fall by over 10%.

The rates set by the Centers for Medicare and Medicaid Services have significant implications for insurers, impacting monthly premiums, plan benefits, and ultimately profitability. Medicare Advantage plans are a popular option for over half of Medicare beneficiaries due to their lower monthly premiums and added benefits not available with traditional Medicare plans, according to KFF. This decision will undoubtedly impact these companies’ ability to generate revenue from their private Medicare plans and may lead to further cost-cutting measures or adjustments in plan offerings.

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