CVS, UnitedHealth, and Humana stocks rise on Medicare rate boost

Published 07/04/2025, 21:30
© Reuters.

Investing.com -- Shares of major healthcare insurers, including CVS Health (NYSE: NYSE:CVS), UnitedHealth Group (NYSE: NYSE:UNH), Humana (NYSE: NYSE:HUM), and Elevance Health, witnessed a significant uptick following the announcement of a substantial increase in Medicare insurer payment rates by the Trump administration. CVS Health's stock rose by 8%, UnitedHealth Group's by 5%, Humana's by 10%, and Elevance Health's by 4%.

The Centers for Medicare and Medicaid Services revealed on Monday that payment rates for Medicare insurers in 2026 would see a 5.06% increase, a figure that more than doubles the 2.23% hike initially proposed by the Biden administration in January, according to a report from the Wall Street Journal. This increase, which surpassed Wall Street analysts' forecasts, is anticipated to generate over $25 billion in additional revenue for the industry.

The revised rate is a response to rising medical costs, with more recent data justifying the steeper increase compared to the earlier proposal. The Trump administration's decision signals robust support for Medicare Advantage, where private insurers manage benefits for the federal program's older and disabled participants.

While the administration upheld a policy change from the Biden era that restricts certain billing practices, potentially increasing payments to Medicare Advantage insurers, it also rejected suggestions to halt the phase-in of this change, set to complete by 2026.

The news marks a positive shift for the healthcare insurance sector, which had previously seen the Medicare business impact margins and share prices negatively. Last week's rule withdrawal of a Biden administration proposal to cover obesity drugs further contributes to a more favorable outlook for these insurers.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.