UnitedHealth and Humana tumbled Tuesday while other health insurers such as CVS Health and Cigna retreated after the Biden Administration announced that final Medicare Advantage rates in 2025 won't change from initial plans in January.
The Centers for Medicare and Medicaid Services announced late Monday that private Medicare Advantage rates will increase an average 3.7% in 2025. That's what CMS proposed in January. Typically the regulator raises rates with the final plan.
UnitedHealth, Humana Biggest Players
UnitedHealth and Humana are the largest Medicare Advantage players, with Humana especially exposed as Medicare makes up a big share of its total revenue. Humana stock plunged 13.4%, hitting a four-year low. UnitedHealth stock sank 6.4% to its worst levels since July.
CVS Health, the drugstore and insurance giant, also is a big Medicare Advantage player. CVS stock retreated 7.2%, below its 50-day and 200-day lines.
Cigna stock dipped 0.3% Tuesday. Cigna has less exposure to the Medicare Advantage market.
UnitedHealth is one of the largest Medicare Advantage players, but smaller players such as Centene and Molina Healthcare, known primarily as Medicaid insurers, took a hit too. Centene slumped 6.8% Tuesday. Molina declined 5.7%.
Elevance Health slumped 3.25% Tuesday. ELV stock fell below its 50-day line.
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