Healthcare stocks decrease following disappointment in Medicare Advantage rates

Medicare Advantage (MA) plan payments for 2025 were lower than expected, putting pressure on healthcare stocks on Tuesday. TD Cowen Senior Equity Research Analyst, Gary Taylor, explains the implications for the industry in an interview with Yahoo Finance Live.

Taylor describes the situation as an “annual political dance” between the industry and Centers for Medicare & Medicaid Services (CMS). When a proposed rule, like the 2025 MA proposed rule, is released, the industry typically lobbies for higher proposed rates. However, this time, CMS did not make any adjustments to the rates in the final notice.

According to Taylor, this decision could lead to healthcare businesses reducing the benefits they offer to seniors next year. This could ultimately improve their margins and drive higher earnings growth in the industry.

To get more expert insights and stay updated on the latest market trends, you can watch the full episode of Market Domination for more information.

By Riley Johnson

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