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- The U.S. announced a 5.06% increase in 2026 Medicare Advantage rates.
- This is more than double the initially proposed 2.2% increase in January.
- Shares of major insurers like UnitedHealth and Humana rose significantly after the news.
WASHINGTON — The U.S. announced a 5.06% average increase in the government's final reimbursement rates for 2026 Medicare Advantage health plans run by private insurers, more than double the increase it proposed in January.
The Centers for Medicare & Medicaid Services, which oversees Medicare and Medicaid health insurance programs, had earlier proposed a 2.2% increase in 2026 payments.
This is a "welcome change of pace" for the insurers, said Morningstar analyst Julie Utterback.
Last year, the government announced a 0.2% decline in the reimbursement rates for 2025.
The rate the U.S. government pays to private health insurers to manage health care 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.
Higher rates will benefit large U.S. health insurers, including UnitedHealth Group and Humana, that have been grappling with steep medical costs related to government-backed Medicare and Medicaid plans.
The final rate indicates "visible evidence of Trump administration's support for MA program," said Bernstein analyst Lance Wilkes.
Shares of UnitedHealth rose about 6%, Elevance Health gained 6.4%, CVS Health added 6.6%, Humana jumped 12.3% and Cigna rose 3% in extended trading.
The Centers for Medicare & Medicaid Services said the rate change primarily takes into account additional data on the increase in costs for the insurers, including payment data through the fourth quarter of 2024.
"By finalizing these payment policies, CMS is ensuring that Medicare Advantage continues to offer access to critical services in an efficient, accountable manner, further strengthening the program's ability to serve beneficiaries," the agency said in a statement.
"We're encouraged that CMS is supportive of this important program," a spokesperson for CVS Health said, adding that 88% of its Medicare Advantage members are currently enrolled in CMS' highly rated plans with four stars or more.
