The actions of UnitedHealth Group shoot at an increase in Medicare Advantage quotas

• UNH actions rose more than 7% on Tuesday.
• CMS increased its proposed Medicare Advantage rate by more than 5%.
• UnitedHealth is the largest plans administrator of Medicare Advantage.
• The Dow Jones and other indices rose 3% due to tariff negotiations before reverse to the negative zone.

UnitedHealth Group (UNH) went up Up to 7% on Tuesday after the Medicare and Medicaid service centers of the United States (CMS) ended a significant increase in the Payments of Medicare Advantage by 2026. CMS, the agency led by Robert F. Kennedy Jr., confirmed an increase in fees of more than the double of the initially proposed level.

The average increase of 5.06% is much higher than the 2.23% initially proposed and could mean additional 25,000 million dollars in financing for US health insuranceers also, competitors such as Human (Hum) and CVS Health (CVS) They saw the price of their shares increase.

The market in general is experiencing a volatile increase on Tuesday due to the belief that US President Donald Trump could be more open to negotiations than was previously thought. The Dow Jones Industrial Index (DJIA), which includes UnitedHealth, rose almost 3%, and both the S&P 500 and the NASDAQ have exceeded that figure in the early session.

“It is true that Trump sounded open to reaching agreements with other countries, saying in his message about tariffs to China that ‘negotiations with other countries, which have also requested meetings, will begin to be held immediately,” said Henry Allen de Deutsche Bank.

Vietnam has requested an extension of 45 days on the tariff of 46% of Trump while negotiating with the administration, while the political advisor and Tesla CEO (TSLA) Elon Musk has directly appealed to the President to put an end to his controversial tariff policy.

News about the actions of UnitedHealth

In January, the outgoing administration of Biden had suggested an increase in quotas of 2.23% by 2025 for Medicare’s plans managed by the private sector called Medicare Advantage. These health insurance plans are for retirees in the US, typically 65 years or older.

Despite the drastic cuts from the Trump administration to most other parts of the Federal Government of the USA through the Department of Government Efficiency of Musk (Doge), the unexpected increase in the payments of Medicare Advantage points out that certain parts of the government will see significant increases in the financing during their mandate. This coincides with the annual military spending that will see an increase proposed to more than 1 billion dollars, announced earlier this week.

The KFF Health Policies Organization reports that 54% of those registered in Medicare in 2024 had registered in Medicare Advantage plans, contributing to approximately 84,000 million dollars in additional government expenses compared to traditional Medicare plans.

Based on data from 2023, UnitedHealth manages approximately 29% of the Medicare Advantage group and has the highest market share. Human is close to 18% of the plans, while CVS Health has 11%.

Unitedhealth actions chart

UNH actions have been in upward trend since its minimum of February 21, but the great increase on Tuesday could mean that it is time to take benefits. The first observation is that UNH’s shares shot at a maximum intradia above $ 585. However, UNH has been in downward trend during the first three hours of negotiation and now there are about $ 560.

Secondly, the relative force index (RSI) is located at 71 on Tuesday, which means that UNH is at this time. If the market experiences another mass sale, this trend could continue back to previous resistance levels in the $ 540. That region acted as resistance last week already early January and February of this year.

In the long term, a break above the previous resistance point at $ 608 will be a very bullish signal.

DAILY AH CHART SHARE GRAPH