Shares of US healthcare insurers moved higher following the announcement of a significant increase in 2026 Medicare insurer payment rates under the Trump administration.
The government announced a 5.06% average increase in payments to private insurers managing Medicare Advantage plans, more than double the 2.23% initially proposed in January under the Biden administration.
This adjustment reflects updated data on rising medical costs and is expected to generate over $25 billion in additional revenue for the sector.
The increased rates provided relief to an industry that faced challenges in 2024 due to high medical costs and insufficient government payments.
Humana (NYSE:HUM) shares jumped 18.7% on the news, while CVS Health Corp (NYSE:CVS) added 10.9%, Elevance Health Inc (NYSE:ELV) was up 8.7% and UnitedHealth Group Inc (NYSE:UNH, ETR:UNH) was up 8.6%.