Overview

• 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.