Overview

• The Centers for Medicare & Medicaid Services announced a 5.06% increase in Medicare Advantage payment rates for 2025, exceeding earlier projections.
• The decision reflects rising healthcare costs and aims to ensure adequate funding for Medicare Advantage plans administered by private insurers.
• Major health insurance stocks surged in after-hours trading, with Humana up 14%, CVS Health up 7%, Elevance Health up 8%, and UnitedHealth Group up 6%.
• This marks a policy shift from the Biden administration's earlier proposed increase of 2.23%, highlighting a different regulatory approach under the Trump administration.
• The announcement coincided with broader market volatility influenced by uncertainties surrounding U.S. trade policy.