Shares of Humana (NYSE:HUM), Centene (NYSE:CNC), and CVS Health (NYSE:CVS) gained on Tuesday as Wall Street reacted to Medicare Part D bid information announced by the Centers for Medicare & Medicaid Services (CMS) for the calendar year 2025.
The national average monthly bid amount (NAMBA) for 2025, as announced by the CMS, indicated a ~179% increase from 2024. Meanwhile, the base beneficiary premium increased by $2.08, which, according to Cantor Fitzgerald, was the largest increase in the program’s history.
Cantor analyst Sarah James added that higher Part D plan premiums could benefit health insurers such as Humana (HUM), Centene (CNC), and CVS (CVS) as long as they do not impact Medicare Advantage operations.
James pointed out that Centene has ~4% revenue exposure to Part D compared to ~2% and ~1% for Humana (HUM) and CVS (CVS), respectively. “MA premiums run 6-7x above Part D, so the mix is important,” the analyst argued.
The CMS also announced a voluntary demonstration program, also known as a low-income subsidy program, to support changes to the Medicare Part D program added under the Inflation Reduction Act (IRA) for 2025.
The subsidies unveiled in the plan were “well above expectations,” TD Cowen analyst Ryan Langston wrote, noting that higher-than-expected subsidies will cut the risk to health insurers as Part D plans incorporate changes under the IRA.
Humana, Centene, CVS gain on Medicare Part D bid information
