• Mon. Apr 15th, 2024

Unpredictable Outlook for Medicare Insurers: Lower Profits and Increased Pressure in the US

BySamantha Jones

Apr 2, 2024
Health insurer stocks take a hit as Medicare Advantage rates fall short of expectations

Insurers in the US saw a decline in their shares on Tuesday following the Biden administration’s decision not to increase payments for private Medicare plans as much as expected. The drop in value affected companies such as CVS Health, UnitedHealth Group, Elevance Health, Centene, and Humana.

Humana was particularly affected as it heavily relies on private Medicare plans. On Monday, the Centers for Medicare and Medicaid Services announced that government payments to Medicare Advantage plans would rise by 3.7% year over year. However, after stripping out certain assumptions, this equated to a 0.16% decline. This news has added pressure on insurers who are already facing high medical costs and challenges following a cyberattack on UnitedHealth Group’s tech unit.

The Medicare Advantage business has traditionally been a source of growth and profits for the insurance industry. More than half of Medicare beneficiaries are enrolled in these plans due to lower monthly premiums and added benefits not covered by traditional Medicare. The rate set by the federal agency determines how much insurers can charge for premiums, plan benefits, and ultimately, their profits. Unfortunately, the current rate remains unchanged from an earlier proposal in January, which is not typical as the agency usually increases the rate after the initial proposal.

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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