Companies that sell Medicare Advantage plans will receive a 2.5% pay bump on average in 2027, up significantly from what was proposed and a win for an industry that has experienced higher medical costs and has opposed nearly all reforms to the lucrative taxpayer-financed program.

More importantly, the Trump administration scrapped a proposal that would have used more updated data in the payment process, ensuring that Medicare Advantage insurers retain billions of dollars.

The finalized rate is estimated to add $13 billion in revenue next year for insurers, according to the Centers for Medicare and Medicaid Services. During trading after the markets closed, the stock prices of UnitedHealth Group, Humana, and CVS Health each climbed by more than 8%. Those companies are the three largest Medicare Advantage insurers, and together cover almost 60% of all people enrolled in the program.

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Today’s the day

By law, the 2027 Medicare Advantage payment regulation must come out today. It will set the tone for how the Trump administration wants to work with the health insurance industry: as the “new sheriff in town” or just another friendly regulator.

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