"Quite a Surprise:" What's Next After UNH, HUM & Healthcare Stocks Drop 20%

• Health insurers like Humana (-21%) and UnitedHealth (-19%) saw sharp drops following the proposed flat Medicare Advantage rates.
• Insurers had expected rate increases to offset rising medical costs and utilization, making the flat proposal a 'big surprise'.
• If finalized, the flat rates could lead to a 15-20% decrease in earnings from Medicare Advantage for some insurers, potentially forcing benefit cuts.
• UnitedHealth's mixed earnings report was overshadowed by the Medicare rate announcement, despite their efforts to improve profitability in other business segments.

Healthcare insurers experienced significant stock declines, with some falling over 20%, after the Trump administration proposed keeping Medicare Advantage rates relatively flat for the upcoming year. This decision was a 'surprise' to insurers who had anticipated increases to cover rising medical costs, potentially leading to earnings decreases and benefit cuts if finalized.