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Health insurance company shares decline as last Medicare Advantage rates fall short – NBC Chicago

The revelation that the Biden administration did not increase payments for private Medicare plans as much as anticipated has caused shares of U.S. health insurers to plummet. This decision adds extra strain on insurers, who are already dealing with high medical costs and uncertainty following the ransomware attack on UnitedHealth Group’s tech unit. The Centers for Medicare and Medicaid Services announced that government payments to Medicare Advantage plans are only expected to rise by 3.7% year over year.

Following the announcement, several health insurers saw declines in their stock prices. CVS Health shares fell over 8%, while UnitedHealth Group’s stock slid nearly 7%. Elevance Health and Centene also experienced stock declines of more than 3% and 6% respectively. Humana, which is heavily reliant on private Medicare plans, saw its stock fall by over 10%.

The news is particularly impactful for companies that rely on Medicare Advantage plans for growth and profits. The rates set by the Centers for Medicare and Medicaid Services have significant implications for insurers, affecting monthly premiums, plan benefits, and ultimately, profitability. Medicare Advantage plans are a popular option for over half of Medicare beneficiaries due to their lower monthly premiums and added benefits not available with traditional Medicare plans, according to KFF.

By Samantha Jones

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