On Tuesday, healthcare stocks faced pressure from the news that Medicare Advantage plan payouts for 2025 would be lower than expected. TD Coven Senior Equity Research Analyst Gary Taylor explained the implications of this decision in an interview with Yahoo Finance Live.

According to Taylor, the latest notification from the Centers for Medicare & Medicaid Services (CMS) did not make any price adjustments, which could lead to healthcare companies reducing the benefits they offer to seniors next year. This could ultimately improve their margins and drive higher earnings growth in the industry.

Taylor described the situation as an “annual political dance” between the industry and CMS. Typically, when a proposed rule is released, the industry lobbies for higher proposed rates. However, this time CMS did not make any adjustments to the rates.

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By Samantha Johnson

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