The U.S. Centers for Medicare & Medicaid Services on Monday announced a 5.06% increase in the government's final reimbursement rates for 2026 Medicare Advantage health plans run by private insurers, compared with a decline of 0.2% last year.
The final payment rates are much higher than the 2.2% increase proposed by the U.S. government in January.
Shares of insurers UnitedHealth Group (UNH.N), Elevance Health (ELV.N), CVS Health (CVS.N) and Humana (HUM.N) surged between 5% and 14% in extended trading.
The CMS, which oversees Medicare and Medicaid health insurance programs, said the rate change is primarily due to the inclusion of additional data on expenses for insurers, including payment data through the fourth quarter of 2024.
The rate the U.S. government pays to private health insurers to manage healthcare under Medicare for people aged 65 and older or with disabilities, influences the monthly premiums they charge, plan benefits they offer and, ultimately, their profits.
