Health insurers get a rise on proposal for better government reimbursement rates
A better-than-expected proposed 2.2% bump to the reimbursement rates the government will pay private insurers operating Medicare Advantage plans next year drove strong stock gains for Humana, CVS Health, UnitedHealth, and Elevance Health on Monday.
“Overall, this was a highly favorable release given the contentious political environment and the recent proposals under this administration, and this should be very positive for the group and for stocks like HUM, UNH, and CVS,” Oppenheimer analyst Michael Wiederhorn wrote in a research note.
After receiving feedback on the proposed rate, the government typically finalizes reimbursement rates in April. Medicare Advantage, the private version of Medicare for older Americans, has been a lucrative and fast-growing business line for the health-insurance industry in recent years.
“Overall, this was a highly favorable release given the contentious political environment and the recent proposals under this administration, and this should be very positive for the group and for stocks like HUM, UNH, and CVS,” Oppenheimer analyst Michael Wiederhorn wrote in a research note.
After receiving feedback on the proposed rate, the government typically finalizes reimbursement rates in April. Medicare Advantage, the private version of Medicare for older Americans, has been a lucrative and fast-growing business line for the health-insurance industry in recent years.
