Medicare Rate Cuts Impact CVS, Humana, and Other Health Stocks

Medicare Advantage and Part D Programs to Receive 3.7% Rate Increase in 2025, Health Insurers Take a Hit; Eli Lily’s Zepbound Faces Drug Shortage, Ozempic Costs Only $5 to Make

Medicare Advantage and Part D prescription drug programs will receive a 3.7% increase in government payments on average year-over-year in 2025, announced the Centers for Medicare and Medicaid Services (CMS) on Tuesday. This news caused the stocks of several health insurance companies, including Humana, CVS Health, UnitedHealth, and Elevance Health, to take a hit during morning trading. Despite this setback, CMS Administrator Chiquita Brooks-LaSure stated that the rate increase is necessary to maintain the stability of these programs and keep payments up-to-date and accurate.

Humana CFO Susan Diamond expressed concerns about the impact of the rate increase on her company’s earnings goals during an investor call in March. Meanwhile, other pharmaceutical news has been making headlines as well. Eli Lily’s Zepbound is currently experiencing a weight loss drug shortage, while a study revealed that Ozempic costs only $5 to make. The pharmaceutical industry has reacted strongly to this news with backlash from various stakeholders.

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