President Donald Trump has won back the White House, and with his win, many health plans are seeing their stocks rise.
Likely expecting a more relaxed regulatory environment that loosens requirements on Medicare Advantage plans and encourages more mergers, some health insurers are reaping initial benefits.
At the time of publication, CVS Health’s stock is up 11.24%, Humana is up 8.56% and UnitedHealth Group 6.03% higher. Elevance Health is seeing a modest 1.23% gain.
Today, CVS recorded $87 million in profit for the third quarter and beat the Street’s expectations. This year, the company has brought in $3 billion in profit, down from $6.3 billion at this time in 2023.
President Joe Biden has faced criticism from insurer-backed trade groups that portray him as an opponent to private insurance plans because of new federal rules seeking to hold Medicare Advantage plans to stronger standards. This caused the country’s top insurers to report, along with staggering profits, struggles tied to increased utilization and stricter federal requirements.
President Trump, on the other hand, is likely to be more favorable to MA plans. Although he distanced from Project 2025 on the campaign trail, the Heritage Foundation-led plan is closely tied to officials that will almost certainly be in or advising his transition team and second term.
The 922-page document explicitly calls for making MA the “default enrollment option” and eliminating “burdensome policies that micromanage MA plans.” It also says the current risk adjustment model should be “reconfigured.”
MA supporters say the program delivers high-quality care and more robust benefits not offered under traditional Medicare.
Critics say the program is costly and hands the keys over to insurers to impose harsh prior authorization and step therapy decisions on a whim. Some experience trouble switching from an MA plan back to traditional Medicare and others say they are faced with ghost networks, where a host of seemingly-available providers are not covered after all.
And despite some support from J.D. Vance and a select group of Republicans, it’s unlikely Federal Trade Commission Chair Lina Khan will remain at her post in a Trump administration. Although pharmacy benefit reform may continue, because it appears to be a rare bipartisan agreement in Congress, other healthcare mergers and acquisitions could get greenlit that may not otherwise seen the light of day in a President Kamala Harris administration.
Cigna recently announced it is engaging in stock buybacks, suggesting a merger with Humana is off the table, but the two companies have flirted at the possibility of a deal for months.
UnitedHealth is hoping to finalize a deal with home healthcare company Amedisys in a transaction valued over $3 billion.
Centene and Molina Healthcare are experiencing small dips in the market, with investors foreseeing tough times ahead. It’s likely Republicans will cut federal funding to state Medicaid programs moving forward, and they have sought to add work requirements for beneficiaries.
The future of Affordable Care Act subsidies, set to expire at the end of 2025, could have a negative impact on these companies. In addition, Oscar Health’s stock has plummeted 14.29%. The company benefits enormously from extended subsidies, though Oscar Health has claimed for months it is not reliant on subsidies to reach its growth goals.
Publicly, insurers think there is enough support for the ACA in right-leaning counties that lawmakers will be forced to protect enhanced tax credits. But President Trump has sought to repeal and replace the ACA for years.