U.S. Finalizes 5.06% Medicare Advantage Rate Hike for 2026

The increase, driven by updated cost data, is expected to generate $25 billion in additional revenue for insurers and has led to a surge in health insurance stocks.

The Medicaid Services (CMS) finalized a 5.06% reimbursement rate increase for Medicare Advantage plans in 2026, more than double the initial January proposal of 2.23%.
This decision reflects new data on rising medical costs through Q4 2024, which significantly influenced the policy shift under the Trump administration.
The rate hike is projected to provide an estimated $25 billion in additional revenue for private insurers managing Medicare Advantage plans.
Major health insurers, including UnitedHealth, Humana, and CVS Health, saw stock prices rise sharply following the announcement, with gains ranging from 6% to 14%.
Analysts view the increase as a relief for insurers facing financial strain from elevated medical costs and a sign of the administration's favorable stance toward Medicare Advantage programs.

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