Trump Administration Boosts Medicare Advantage Plans by $25 Billion

The Trump administration has announced a significant increase of $25 billion for Medicare Advantage plans set for 2026, surpassing earlier projections. The Centers for Medicare & Medicaid Services (CMS) indicated that projected payments are expected to rise by an average of 5.06% from 2025 to 2026, which is an increase of 2.83 percentage points from prior estimates. This adjustment follows the inclusion of new data on fee-for-service expenditures, which accounts for payments made to providers for individual services.

In reaction to this announcement, the stock prices of several major insurance companies jumped significantly. UnitedHealthcare experienced an 8% increase in stock price, while Humana saw a 9% rise. More than 54% of Medicare-eligible individuals are currently enrolled in Medicare Advantage plans, and it's projected that around $540 billion will be spent on Medicare Advantage in the current year.

Medicare Advantage plans allow enrollees to use private insurance instead of the traditional government program, leading to varying out-of-pocket costs for beneficiaries. UnitedHealthcare and Humana are noted as the two largest providers in this market, emphasizing the growing importance of private insurance options in the healthcare landscape.