UNH, HUM, CVS Shares Fall On Plans To Keep Medicare Payments Flat Next Year

• Under the proposal, Medicare plans will be paid just $700 million more in 2027 compared to this year.
• The rates will now be finalized in April, implying it might also increase in the months ahead.
• CMS also proposed excluding diagnosis information from unlinked chart review records from risk score calculation starting in CY 2027.

Shares of major health insurers UnitedHealth Group (UNH), Humana (HUM), and CVS Health (CVS) fell after-hours on Monday after the Centers for Medicare and Medicaid Services proposed a roughly flat increase in payments for private Medicare plans next year.

While UNH shares slumped 9% after hours, HUM shares slipped 13% and CVS declined over 9%. Shares of Molina Healthcare (MOH) and Elevance Health (ELV) also slipped 3% and 6%, respectively.  

The Proposal

CMS said that the proposed policies are projected to result in a net average year-over-year payment increase of 0.09% for Medicare Advantage plans in CY 2027. According to the Wall Street Journal, analysts expected roughly 4-6% increase, in line with the 5.06% spike this year.

Under the proposal, Medicare plans will be paid just $700 million more in 2027 compared to this year. This is a huge hit for Medicare insurers who have flagged higher care costs in recent quarters.

“These proposed payment policies are about making sure Medicare Advantage works better for the people it serves,” said CMS Administrator Dr. Mehmet Oz. He also said that the agency wants to protect taxpayers “from unnecessary spending that is not oriented towards addressing real health needs.”

CMS also proposed excluding diagnosis information from unlinked chart review records, which is diagnosis information not associated with a specific medical encounter, from risk score calculation, starting in CY 2027. This could also slash payments for the companies which seek to document illnesses through chart data to boost payments. Payments in the MA program increase when the patient is sicker.

The payment rates will now be finalized in April, implying it might also increase in the months ahead.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around UNH, HUM and CVS stocks trended in the ‘extremely bullish’ territory at the time of writing, while message volume stayed at extremely high levels.

While UNH and HUM shares have dropped 35% and 13% respectively over the past 12 months, CVS stock has gained 49%. 

Also See: LUNR Shares Edge Up 3% After Hours — What's Intuitive’s Role In NASA’s Artemis Program?

For updates and corrections, email newsroom[at]stocktwits[dot]com.

Share

·

Add us on