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Home/Financial Foundation/OSCAR HEALTH · HEALTH INSURANCE COVERAGE DENIED

Medicare's $13 Billion Rate Hike Lifts Health Insurance Equity Values

FF

Felix Fletcher

Oscar Health · Apr 10, 2026

Medicare's $13 Billion Rate Hike Lifts Health Insurance Equity Values

Source: The Digital Ledger Data Terminal

The S&P 500 Health Care Index rose 2% immediately after Medicare announced that insurer payment rates are projected to rise by 2.48% in 2027. This increase represents over $13 billion in additional funding. When combined with risk adjustment changes, health insurers are looking at a total payment boost of roughly 5%.

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prescription drugs

Trump's Drug Price Website Offers Deep Discounts, But Most Americans Won't Benefit

Paying cash for prescription drugs — even at a discount of up to 93% — won’t count toward your insurance deductible or out-of-pocket maximum. That means for most Americans with health coverage, using TrumpRx.gov may save money in the moment but delay access to full insurance benefits later. The site, launched by former President Donald Trump, offers price comparisons for 43 medications purchased directly from 16 drug manufacturers. But if your drug isn’t on the list, or you’re counting on meeting your deductible, the deal quickly loses value. Approximately 68% of Americans take prescription drugs regularly, and 8% skip doses due to cost. For the 17.9% of Americans under 65 without insurance, TrumpRx could offer real relief — assuming their medication is among the 43 covered. But for the majority with insurance, the structural flaw is decisive: the transaction doesn’t register with their insurer. George Chapman, a retired hospital consultant, calls the program unlikely to help many. He notes that Congress banned Medicare from negotiating drug prices in 2003 — a concession to drug companies when Part D was created. The Inflation Reduction Act only reversed that partially, allowing negotiation for 15 drugs a year. Meanwhile, the U.S., with 5% of the world’s population, buys half of all prescription drugs, subsidizing global R&D. Prices remain opaque, pharmacy benefit managers deliver minimal savings, and Congress has refused to impose price transparency. TrumpRx highlights the dysfunction — but doesn’t fix it.

UnitedHealth Group, the largest Medicare Advantage provider in the U.S., sees increased earnings visibility heading into 2027. This shift reduces pressure from prior industry concerns regarding reimbursement compression and market utilization spikes. Bernstein analyst Lance Wilkes raised the price target on UnitedHealth Group to $405, while Goldman Sachs analyst Scott Fidel increased the target to $400.

Related Brief2d ago
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Medicare Advantage rate hikes provide $13 billion boost to UnitedHealth Group

UnitedHealth Group shares jumped more than 11% at one point and closed up more than 9% on Tuesday. The rally followed news that the Centers for Medicare & Medicaid Services finalized its 2027 Medicare Advantage rate update. The update shows a net average year-over-year increase of 2.48% in Medicare Advantage plan payments in 2026. This represents a $13 billion increase, compared to a previous estimate of 0.09%, or $700 million.

Humana, which derives over 50% of its annual revenue from Medicare Advantage, will leverage stronger cost predictability and improved margins. Shares of the company rose 8% following the news.

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taxation

New Tax Regime Maintains Full Interest Deductions for Let-Out Properties

Taxable rental income is reduced through the application of a 30% standard deduction and the deduction of housing loan interest. Under the new income tax regime, rental income is categorized as Income from house Property. The calculation begins with gross rent received, which is reduced by municipal taxes paid by the owner to arrive at the Net Annual Value. A flat 30% standard deduction for maintenance and repairs is applied to this value without requiring bills or proof. Interest paid on a housing loan for a let-out property is fully deductible without an upper limit. The remaining balance is the taxable income from house property.

Oscar Health saw its share price skyrocket 20.2% in the week following the announcement. On April 6, CEO Mark Bertolini purchased 1 million shares at $11.90 per share.

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Oil Price Spikes and Inflation Data Force Federal Reserve to Hold Rates Steady

The Dow fell 1.6%, the S&P 500 fell 1.4%, and the Nasdaq Composite lost 1.5%, reaching their lowest levels since November. The 10-year U.S. note yield rose nearly 6 basis points to approximately 4.26% as investors sold bonds. These movements occurred after the Federal Reserve concluded a policy meeting on March 18 with no change to interest rates. Fed Chair Jerome Powell cited inflation concerns and uncertainty from the war in Iran as the reasons for the decision. A measure of wholesale price inflation arrived hotter than analysts had expected. Brent crude oil prices rose nearly 6% to around $105 a barrel, while the nationwide average for a gallon of gas is $3.86. The VIX Composite spiked nearly 10%.

Oscar Healthhealth insurance coverage deniedhealth insurance deductible

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