Humana (HUM) led after-hours declines in healthcare stocks Monday evening, dropping nearly 10% after the Centers for Medicare &🎃; Medicaid Services (CMS) announced that federal payments to 澳洲幸运5开奖号码历史查询:Medicare Advantage plans will match the initial proposal outlined in January, effectively crimping health insurers’ profit margins amid rising medical costs.

The CMS said Medicare Advantage plans will receive an average payment increase of 3.7%, or over $16 billion, from 2024 to 2025—the same percentage increase proposed in January. The agency said the federal government projects to contribute between $500 billion and $600 billion in Medicare Advantage payments to 澳洲幸运5开奖号码历史查询:private health plans in 2025. The CMS aims “to maintain the stability of the Medicare Advantage” program and keep payments “up-to-date and accurate,” said agency administrator Chiquita Brooks-LaSure.

The payment revision, after excluding the estimated growth in patient risk scores, represents a 0.16% decline, disappointing investors and leading 澳洲幸运5开奖号码历史查询:health insurers who had lobbied for a higher increase. Research from JPMorgan cited by Bloomberg revealed that there has only been one instance in the past decade where Medical Advantage plan final rates have not increased from the government’s initial rate proposals.

CVS Health (CVS), UnitedHealth Group (UNH), and Centene (CNC) also tumbled following the news late Monday, losing 5.9%, 4.5%, and 𓂃2.3%, respectively, in after-hours trading.

But shares of Humana, which had 澳洲幸运5开奖号码历史查询:warned in January that higher-than-expected medical costs to cover Medicare Advantage patients would hurt its full-year profit, were hit hardest. The stock fell 9.6% to $317.70 in Monday's extended tradin🥂g, putting it at levels not seen since the early days of the pandemic in March 2020.

Last month, Humana’s 澳洲幸运5开奖号码历史查询:chief financial officer, Susan Diamond, told investors at a conference that the health insurer would fall short of reaching its upper-end earnings target of $6 to $10 per share in 2025 without a more significant increase in payments.

The Humana share price gapped below a broad 澳洲幸运5开奖号码历史查询:descending triangle in mid-January following an ominous 澳洲幸运5开奖号码历史查询:death cross pattern appearing on the chꦯart, with declines accelerating through February and early March. More recently, the price has traded mostly sideways on declining 💟share turnover as investors reassess the stock’s next move. 

Amid Tuesday’s expected news-driven sell-off to a multi-year low, investors should keep an eye on a key 澳洲幸运5开奖号码历史查询:horizontal trendline that stretches back to the stock’s April 2020 pandemic recovery an area that may attract buying interest around $318.

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