Health Insurers UnitedHealth, CVS, and Humana Drop After CMS Approves 3.7% Medicare Advantage Rate Increase 📉

Shares of major health insurers UnitedHealth Group, CVS Health, and Humana fell after the CMS approved a 3.7% payment rate increase for Medicare Advantage plans in 2025. Analysts expected a higher rate increase to better keep up with rising medical costs, but the approved increase was in line with previous CMS proposals. Insurers have argued the payment rates are inadequate and will destabilize their businesses as medical inflation outpaces revenue growth. The actual "core" payment rate increase is estimated to be a 0.16% decline after factoring in higher expected utilization trends expected in 2025.