Health stocks decline following disappointing Medicare Advantage rates

Healthcare Stocks Face Pressure Over Lower-Than-Expected Medicare Advantage Payments for 2025

Medicare Advantage plan payments for 2025 have come in lower than expected, putting pressure on healthcare stocks. TD Cowen Senior Equity Research Analyst, Gary Taylor, discussed the implications for the healthcare industry in an interview with Yahoo Finance Live. According to Taylor, this is a part of an “annual political dance” between the industry and Centers for Medicare & Medicaid Services (CMS).

When a proposed rule like the 2025 Medicare Advantage (MA) proposed rule is issued, the industry typically lobbies for higher proposed rates. However, this time CMS did not make any adjustments, leading to potential industry fallout. Taylor warns that this could push the industry to reduce the benefits they offer to seniors next year, which may help boost margins for healthcare businesses.

The combination of lower rates for 2025 and potential benefit reductions could lead to higher earnings growth. For more expert insights and the latest market updates, watch the full episode of Market Domination.

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