US health insurer shares surged Monday after the Trump administration announced a 2.5 per cent increase in Medicare payments, worth over $13 billion in 2027. Humana and UnitedHealth shares jumped 11 per cent and 8 per cent respectively in after-market trading, reversing steep losses from January when the administration initially proposed only a 0.09 per cent increase.

Insurance companies had lobbied aggressively for higher payments, warning that lower rates would force seniors to pay more for Medicare Advantage plans. The industry group America's Health Insurance Plans spent a record $17.2 million on lobbying in 2025, arguing that rising medical costs required larger government support. The January proposal had caused both companies' shares to drop about 20 per cent.

Analysts at Oppenheimer called the decision a major reprieve for the Medicare Advantage industry, which collected nearly $540 billion from the US government in 2025. The final increase exceeded typical adjustments between initial and final CMS proposals, which historically averaged about one percentage point over the past decade. The announcement delivered welcome relief to an industry facing challenging conditions in recent months.