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Washington Blinked and Health Insurers Made $13 Billion – Moby <\/p>\n Washington Blinked and Health Insurers Made $13 Billion – Moby <\/p>\n
The health insurance lobby has been living rent-free inside Washington’s head for years, and on Monday it finally collected the lease. The Centers for Medicare & Medicaid Services finalized a 2.48% average payment increase for Medicare Advantage plans in 2027, amounting to $13 billion in additional funding. Back in January, the agency had proposed a nearly flat 0.09% bump worth around $700 million. Plot twist!<\/p>\n
Markets responded accordingly. UnitedHealth jumped 8% (underdog story of the year, you guys), Humana popped 5%, and CVS cleared 4%, the kind of afternoon that makes health insurance executives feel briefly, dangerously, like they are winning. The rate is not exactly a gusher in isolation, but it gives insurers room to expand margins in 2027 if they keep doing what they do best: trimming benefits and managing costs.<\/p>\n
The 2.48% headline figure also understates the actual windfall. Fold in estimated risk score trends driven by population changes and coding practices, and the effective increase lands closer to 5%. Coding practices are the polite term for a game the industry has been running for years, upcoding patients to appear sicker than they are to unlock higher government payments. The agency says it wants to clean that up, while simultaneously handing insurers their biggest rate increase since last year’s 5.06%. The jury on that commitment remains out.<\/p>\n
The agency’s administrator is Dr. Mehmet Oz (never not funny) who called it a win for seniors and taxpayers alike. The stocks suggest someone is winning. Taxpayers can figure out which column they fall in.<\/p>\n
UnitedHealth Group (UNH) \u2014 The company’s stock jumped 8% immediately following the announcement of increased Medicare Advantage payment rates, providing an opportunity for margin expansion in 2027.<\/p>\n
Humana Inc. (HUM) \u2014 The company’s stock popped 5% in response to the finalized 2.48% payment increase for Medicare Advantage plans, signaling improved profitability prospects.<\/p>\n
CVS Health Corp (CVS) \u2014 As the owner of Aetna, CVS saw its stock clear 4% due to the favorable Medicare Advantage payment rate increase, enhancing its health insurance segment’s outlook.<\/p>\n
Elevance Health Inc. (ELV) \u2014 As a major managed care organization, Elevance Health is expected to benefit from the industry-wide increase in Medicare Advantage payments, offering potential for margin growth.<\/p>\n
Centene Corp (CNC) \u2014 Centene, a significant provider of government-sponsored healthcare programs, will likely see a positive impact from the increased Medicare Advantage funding, supporting its revenue and profitability.<\/p>\n
Cigna Group (CI) \u2014 Cigna’s health services and insurance segments are poised to benefit from the higher Medicare Advantage payment rates, contributing to its financial performance.<\/p>\n
Molina Healthcare Inc. (MOH) \u2014 Molina Healthcare, which focuses on government programs, stands to gain from the enhanced Medicare Advantage payments, bolstering its financial outlook.<\/p>\n
Health Insurance \u2014 The industry directly benefits from the Centers for Medicare & Medicaid Services’ decision to increase Medicare Advantage payments by 2.48% for 2027, leading to higher revenue and margin potential.<\/p>\n
Managed Care \u2014 Companies within the managed care sector, which includes Medicare Advantage plans, will see improved financial prospects due to the substantial increase in government funding.<\/p>\n