Elevance Health Stock Soars 8% on CMS Payment Boost

Elevance Health's stock surged 8% in pre-market trading on April 8, 2025, driven by a significant boost in government payments to Medicare Advantage plans.

The U.S. Centers for Medicare & Medicaid Services (CMS) announced a substantial increase in payments to Medicare Advantage plans, which has led to a rally in health insurers' shares. The final rate decision by CMS revealed an average increase of 5.06% in payments from 2025 to 2026, marking a 2.83 percentage point rise since the initial proposal. This translates to an over $25 billion increase in Medicare Advantage payments, significantly impacting leading health insurers.

Elevance Health, along with other major insurers, has seen a notable rise in stock prices following the CMS announcement. This increase is attributed to the enhanced financial support for Medicare Advantage plans, which is expected to bolster the insurers' revenue and profitability. The decision comes after a recent decline in Medicare coverage for expensive obesity medications, further emphasizing the importance of the CMS's payment increase for the industry.