By Catherine Dunn
The federal government is expected on Monday to say how much it will pay insurers in the Medicare program next year, a highly anticipated financial data point for some of the country's largest health insurance companies.
A small proposed rate increase of 0.09%, announced in late January, caught the industry by surprise and shares of UnitedHealth Group and Humana fell on the news. Now Wall Street is watching for any improvement in the final rate notice.
It wouldn't be unusual for the Centers for Medicare and Medicaid Services to release a higher final rate compared with the initial proposal. Still, "we see a more tepid rate" in the range of a 1% to 1.5% bump, wrote TD Cowen's Ryan Langston in a Monday morning note.
Medicare Advantage is the privately-run option for seniors to access Medicare health benefits -- and it's a big source of business for insurers.
About 35 million beneficiaries are in Medicare Advantage plans this year, according to the health research group KFF. Enrollment in the privately-run plans has steadily grown to surpass enrollment in traditional Medicare plans operated by the government.
Insurers and their trade groups have pushed for a higher rate increase over the last couple of months, saying the proposal doesn't reflect medical cost trends.
"A near-zero payment update when medical costs are rising 7% to 9% a year does not hold the program steady," the Better Medicare Alliance said last month. "It functions as a cut."
At the same time, bipartisan calls to curb Medicare Advantage spending have added pressure to the rate dialogue. Republicans and Democrats have both raised concerns about practices that allow insurers to collect higher payments for beneficiaries with more recorded medical diagnoses.
Under the Biden administration, the Medicare agency began to tighten payments tied to coding, also known as risk scores or risk adjustment. The agency's January rate proposal, now under the Trump administration, signaled a willingness to continue such scrutiny.
Write to Catherine Dunn at catherine.dunn@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 06, 2026 14:42 ET (18:42 GMT)
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