Medicare Advantage Payments to Rise 2.48 Percent in 2027
US officials finalized a 2.48 percent rate hike for Medicare Advantage plans. The move adds 13 billion dollars in payments and lifted insurer share prices.
The United States government has finalized an average rate increase of 2.48% for 2027 payments to private insurers managing Medicare Advantage plans. This final figure represents a substantial upward revision from the near-flat 0.09% increase initially proposed in January. According to the Centers for Medicare & Medicaid Services (CMS), the new rate is projected to result in a net average increase of more than $13 billion in additional payments to these plans. The decision provides significant relief for major insurance providers, including UNITEDHEALTH GROUP INC, HUMANA INC, and CVS HEALTH CORP. These companies had previously seen billions of dollars in market value erased following the initial proposal. While UnitedHealth Group Inc and CVS Health Corp maintain broader business lines that provide a buffer against Medicare Advantage volatility, Humana Inc remains more heavily concentrated in these plans for older adults. Market reaction was swift following the announcement, with shares of UnitedHealth, CVS, and Humana rising between 8% and 14% in extended trading. The finalized rate marks a shift in the regulatory outlook for the sector, which had been bracing for much tighter margins under the previous proposal.
