It’s a good day for America’s largest health insurance stocks.
The biggest players in America’s private, for-profit health insurance system, including UnitedHealth Group Incorporated (NYSE: UNH), Humana Inc. (NYSE: HUM), and CVS Health Corporation (NYSE: CVS), are all seeing their share prices rise after the Trump administration announced it will backtrack on earlier proposals and increase Medicare insurer payments significantly more than expected.
Here’s what you need to know.
What’s happened?
On Monday, the Centers for Medicare & Medicaid Services (CMS), the federal agency that manages America’s government-funded health programs, including Medicare, announced that it would increase payments to Medicare insurers by a net average of 2.48% in 2027.
This increase is significantly more than the original 0.9% increase that the CMS said it would implement in 2027, and comes after intense lobbying and pushback from the private insurance industry when that sum was announced in January.
The revised Medicare Advantage payment rate announcement sent health insurance stocks surging, and means that an additional $13 billion in Medicare Advantage will be made to private health insurers in 2027.
As noted by Reuters, a Medicare agency official also confirmed that private insurers would get an additional 2.5% benefit in 2027.
