What Happened?
A number of stocks jumped in the afternoon session after the government announced a surprise increase in payment rates for Medicare Advantage plans.
This change raises the revenue that insurance companies receive per patient from federal funds without increasing their costs. This is projected to improve profit margins for major providers like UnitedHealth and Humana.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Health Insurance Providers company Alignment Healthcare (NASDAQ: ALHC) jumped 18.7%. Is now the time to buy Alignment Healthcare? Access our full analysis report here, it’s free.
- Health Insurance Providers company Centene (NYSE: CNC) jumped 2.7%. Is now the time to buy Centene? Access our full analysis report here, it’s free.
- Health Insurance Providers company CVS Health (NYSE: CVS) jumped 7%. Is now the time to buy CVS Health? Access our full analysis report here, it’s free.
- Health Insurance Providers company Elevance Health (NYSE: ELV) jumped 3.7%. Is now the time to buy Elevance Health? Access our full analysis report here, it’s free.
- Health Insurance Providers company Clover Health (NASDAQ: CLOV) jumped 4.8%. Is now the time to buy Clover Health? Access our full analysis report here, it’s free.
Zooming In On Alignment Healthcare (ALHC)
Alignment Healthcare’s shares are very volatile and have had 26 moves greater than 5% over the last year. But moves this big are rare even for Alignment Healthcare and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 22 days ago when the stock gained 3.3% on as easing crude oil prices helped lift investor sentiment and reduce inflation worries.
The retreat in oil prices provided temporary relief to a market that was volatile amid geopolitical tensions. Lower energy costs can help temper inflation, which had been a primary concern for the economy and corporate profits.
As a result, major indices like the S&P 500 and Dow Jones Industrial Average saw significant gains. This positive macroeconomic development boosted investor confidence across most sectors, leading to widespread buying activity that included major stocks within the healthcare industry, which rose in tandem with the overall market.
Alignment Healthcare is up 9.3% since the beginning of the year, and at $22.11 per share, it is trading close to its 52-week high of $23.81 from January 2026. Investors who bought $1,000 worth of Alignment Healthcare’s shares 5 years ago would now be looking at an investment worth $1,016.
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