On Tuesday, shares of US health insurers fell after the Biden administration failed to increase payments to private Medicare plans as much as expected. This news sent stocks such as CVS Health, UnitedHealth Group, Elevance Health, Centene and Humana down.

Humana was particularly affected because it relies heavily on private Medicare plans, also known as Medicare Advantage. The Centers for Medicare and Medicaid Services announced on Monday that government payments to Medicare Advantage plans will rise 3.7% from a year earlier, which equates to a 0.16% decline after removing certain assumptions. The decision added to the pressure on insurers already facing high medical costs and challenges following a cyberattack on UnitedHealth Group’s tech unit.

The Medicare Advantage business has traditionally been a source of growth and profit for the insurance industry. More than half of Medicare beneficiaries are enrolled in these plans because of the lower monthly premiums and additional benefits not covered by traditional Medicare. The rate set by the federal agency determines how much insurers can charge for premiums, planned benefits and ultimately, their profits. However, this year’s rate remains unchanged from an earlier proposal in January, which is not typical as the agency usually raises the rate after the initial proposal.

Investors were disappointed with this outcome and began selling off shares in anticipation of lower profits from their investments in healthcare companies that rely on private Medicare plans. The market was volatile as investors searched for signs of economic recovery amidst ongoing uncertainty around COVID-19 cases and vaccinations worldwide.

By Samantha Johnson

As a dedicated content writer at newspuk.com, I immerse myself in the art of storytelling through words. With a keen eye for detail and a passion for crafting engaging narratives, I strive to captivate our audience with each piece I create. Whether I'm covering breaking news, delving into feature articles, or exploring thought-provoking editorials, my goal remains constant: to inform, entertain, and inspire through the power of writing. Join me on this journalistic journey as we navigate through the ever-evolving media landscape together.

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