Health Insurance Stocks Take a Hit as Medicare Advantage Rates Stay Flat and Mergers Fall Through

What is causing the drop in health insurance stocks HUM, UNH, and CI today?

The Biden administration’s decision to not increase Medicare Advantage rates for 2025 has caused a decline in health insurance stocks. This was unexpected as the government typically raises rates compared to initial proposals. However, this is only the second time in the last decade that rates have not been increased, putting more financial strain on health insurance companies. At the same time, medical prices are rising due to inflation and increased interest rates, along with patients utilizing their insurance more than anticipated.

In addition to this news, discussions of a merger between major players in the industry have also fallen through due to concerns about the Federal Trade Commission blocking the combination. This has added another layer of uncertainty to an already challenging market for health insurance companies.

As a result of these factors, Humana stock has dropped by 13.8%, UnitedHealth is falling by 6.1%, and Cigna is decreasing less than 1%. Investors interested in more stock market news can find additional updates on various companies like Ubisoft, Canoo, and Gritstone Bio by checking out related articles. As of the publication date, the writer did not hold any positions in the securities mentioned in the article.

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