Shares of US health insurers surged on Tuesday after the government announced a bigger-than-expected increase in Medicare reimbursement rates for 2026. The 5.06% average hike more than doubled January’s proposed rate and could help boost profit margins for the sector, which has faced rising medical costs.
Medicare-focused insurer Humana led gains with a 16% surge, while other health insurers including UnitedHealth Group, Centene, and CVS Health advanced between 5-10%. The increase signals support from President Trump’s administration towards Medicare Advantage plans, according to Jefferies analysts.
The rate change is attributed to additional data on rising costs for insurers, including fourth-quarter payment data. The news comes after a rough 2024 for health insurance stocks due to low government payments and high medical costs.
However, some stocks have recently performed well despite market volatility. Centene and Molina Healthcare notched gains last week amid broader market downturns triggered by Trump’s tariff announcement.
Source: https://finance.yahoo.com/news/health-insurance-stocks-rise-best-101046907.html