In premarket trading on Tuesday, shares of prominent U.S. health insurers witnessed a significant drop, ranging between 4% and 9%.

This downturn followed the announcement that reimbursement rates for providers of Medicare Advantage health plans will remain unchanged from the initial proposal.

The decision has sparked concerns over potential margin pressures in the coming year.

The U.S. Centers for Medicare & Medicaid Services (CMS) disclosed that payments to Medicare Advantage (MA) programs, catering to individuals aged 65 and older, are slated to increase by an average of 3.7% in 2025.

This figure aligns with the projections published earlier in January. However, after adjusting for certain items, analysts have pointed out that this increase effectively translates to a 0.16% decrease.

Following this development, Humana (NYSE:HUM) experienced the steepest decline, plummeting by 8.8%, largely due to its heavy involvement in the Medicare Advantage sector.

Other notable insurers, including UnitedHealth (NYSE:UNH) and CVS Health (NYSE:CVS), saw their shares fall by 4% and 5%, respectively.