Health insurance stocks rise on 'best case scenario' Medicare payment rates
April 8 (Reuters) - Shares of U.S. health insurers jumped on Tuesday after a bigger-than-expected increase in the government's reimbursement rates for Medicare Advantage plans in 2026, bringing some relief to a sector burdened with elevated medical costs.
Industry bellwether UnitedHealth Group's (UNH.N), opens new tab shares rose nearly 6% in premarket trading, while Centene (CNC.N), opens new tab and CVS Health (CVS.N), opens new tab also saw increases of 5% to 6%, further boosting a sector that has largely held firm amid a recent market rout.
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The U.S. announced a 5.06% average increase in payments to private insurers that run Medicare Advantage plans for people aged 65 and older. The increase was more than double the amount proposed in January, and contrasts with the 0.2% decline in 2025 reimbursement rates.
A best-case scenario 2026 final MA rate notice coupled with rising tariff risk make health insurers a strong relative safe haven, Baird Research analysts wrote in a note to clients.
The Centers for Medicare & Medicaid Services said the rate change primarily takes into account additional data on rising costs for insurers, including payment data through the fourth quarter of 2024.
Health insurance stocks had a rough 2024 with most companies ending the year in the red due to low government payments, high medical costs and a public backlash against the sector after the murder of a UnitedHealth executive.
However, some stocks have survived a recent market rout as worries over a trade war escalate. Centene and Molina Healthcare (MOH.N), opens new tab notched gains in share prices last week, even as broader markets plunged after President Trump's tariff announcement.
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- ITV News
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The diplomat said Israel is facing its "Churchill moment" as Netanyahu finds himself in a similar position as the British wartime leader did in 1940 - drawing the US into a war with its enemy. Speaking to The Sun at its headquarters in London, she said: "When they're calling for de-escalation, you need to understand that the only way to de-escalate the situation is by removing the threat. "As long as Iran will race faster to have its ballistic missile programme that can destroy cities in Israel, if we will let them continue with that, cities in the UK won't be safe." READ THE INTERVIEW HERE European and Iranian officials met yesterday in Geneva, and Trump has said he will allow two weeks for negotiations before deciding whether to strike the rogue nation. Iran's foreign minister Abbas Araghchi made a condition for renewed talks a ceasefire, saying: "There is no room for negotiations with the U.S. until Israeli aggression stops." Talks later on Friday between Araghchi and officials from the EU ended without a breakthrough after four hours. No date was set for the next round of talks, aimed at getting Iran back to the negotiating table with the US. Missiles continued to rain down in Iran and Israel as the talks were held on Friday in a scramble to de-escalate the conflict. Netanyahu has insisted Israel's military operation in Iran would continue for as long as it takes to eliminate the "existential threat" of Iran's nuclear program and arsenal of ballistic missiles. 9 9 Trump will decide within two weeks whether to join Israel's campaign Credit: Getty 9 Smoke pours from Iran's state broadcaster building following an Israeli attack Credit: Reuters 9 Iran's supreme leader Ayatollah Ali Khamenei is refusing to back down Credit: AFP Israel's top general echoed the warning, saying the Israeli military was ready for a prolonged campaign. Iran previously agreed to limit its uranium enrichment and allow international inspectors access to its nuclear sites under a 2015 deal. But after Trump pulled the US unilaterally out of the deal during his first term, Iran began enriching uranium up to 60 per cent a short, technical step away from weapons-grade levels of 90 per cent. Access was also restricted access to its nuclear facilities. Netanyahu signed off a plot to bomb Iran's nuke facilities last week - killing several of its top generals and nuclear scientists, and striking several nuclear facilities. Iran has retaliated by firing 450 missiles and 1,000 drones at Israel, according to Israeli army estimates. Most have been shot down by Israel's multitiered air defenses, but at least 24 people in Israel have been killed and hundreds wounded.
