Health insurance stocks tank on Trump proposal for flat Medicare Advantage reimbursements

Shares of several large health insurance companies tanked on Tuesday after the Trump administration proposed keeping Medicare Advantage reimbursement rates roughly the same through 2027.

Stock prices for Humana and UnitedHealth Group dropped roughly 20% in early trading on Tuesday morning following the Medicare Advantage reimbursement rate news. CVS Health fell 10%, Elevance plummeted more than 11%, and Centene Corp dropped 9%.

Medicare Advantage insurance plans are offered to seniors over age 65 as an alternative to traditional fee-for-service Medicare. Both Medicare tracks are overseen by the Centers for Medicare and Medicaid Services, headed by President Donald Trump’s appointee, Dr. Mehmet Oz.

CMS’s proposal, published Monday, entails a virtually flat payment increase of 0.09% for Medicare Advantage providers in 2027, a steep decline from the 5%