• Wed. Apr 17th, 2024

Health Insurers Feel the Pressure: Biden Administration’s Medicare Payments Fall Short of Expectations

BySamantha Jones

Apr 2, 2024
Health insurance company shares decline as last Medicare Advantage rates fall short – NBC Chicago

The recent news that the Biden administration did not increase payments for private Medicare plans as much as expected has put additional pressure on U.S. health insurers, which are already dealing with high medical costs and uncertainty following the ransomware attack on UnitedHealth Group’s tech unit. According to a statement from the Centers for Medicare and Medicaid Services, government payments to Medicare Advantage plans are only expected to rise by 3.7% year over year, which is significantly less than what was hoped for by many in the industry.

In response to this news, 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 announcement 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, impacting 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. However, without adequate funding from the government, it becomes difficult for insurers to maintain these benefits while also turning a profit.

By Samantha Jones

As a content writer at newsnnk.com, I weave words into captivating stories that inform and engage our readers. With a passion for storytelling and an eye for detail, I strive to deliver high-quality and engaging content that resonates with our audience. From breaking news to thought-provoking features, I am dedicated to providing informative and compelling articles that keep our readers informed and entertained. Join me on this journey as we explore the world through the power of words.

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