NEW YORK, July 31, 2026, 1:22 p.m. EDT — U.S. markets now open.
Centene NYSE:CNC stands out as the insurer most exposed to the risks from the Medicare Part D subsidy phaseout. Approximately 90% of its prescription drug plan members are enrolled in standalone plans. The CMS will terminate the temporary premium policy following 2026.
This year’s demonstration had an estimated price tag of $3.6 billion. Participating plans saw their base premiums drop by $10 per month. Ending the program is not a straightforward loss of revenue. For investors, concerns include shifts in plan value, customer retention and plan choices.
CVS Health NYSE:CVS occupies a middle ground between the two insurance models. Humana NYSE:HUM and UnitedHealth Group NYSE:UNH control bigger Medicare Advantage drug portfolios, providing those firms with greater internal retention if members move between channels.
2026 breakdown of Part D enrollment
| Sponsor | Standalone PDP members | MA-PD members | Standalone share | PDP-to-MA-PD ratio |
|---|---|---|---|---|
| Centene | 8.74 million | 0.92 million | 90% | 9.5x |
| CVS Health | 3.86 million | 3.17 million | 55% | 1.2x |
| Humana | 3.68 million | 6.21 million | 37% | 0.6x |
| UnitedHealth | 3.74 million | 8.03 million | 32% | 0.5x |
The totals cover both individual and employer-group plans. All shares and ratios are derived from KFF data.
The extent of Centene’s concentration is greater than the sponsor numbers indicate. The Wellcare Value Script plan alone serves 6.1 million individuals outside group coverage. The typical monthly premium is under $6. Enrollment climbed by 1.1 million for 2026.
Minor shifts in retention can have an impact at this scale. Wellcare Value Script accounts for about a third of the non-group standalone market. Maintaining its low-price strategy could become more challenging if the subsidy is removed.
Comparison of Part D policies
| Measure | 2026 | 2027 | Change |
|---|---|---|---|
| National average monthly bid | $239.27 | $296.05 | Up 23.7% |
| Base beneficiary premium | $38.99 | $41.33 | Increase of 6.0% |
| Demonstration premium reduction | $10 monthly | Ends | Support discontinued |
| Demonstration premium-increase limit | $50 monthly | Ends | Demo cap withdrawn |
| Annual drug out-of-pocket cap | $2,100 | $2,400 projected | Up 14.3% |
| Average standalone premium | $36 | To be announced | Expected September |
*Initial technical figures from CMS. The bid figure does not represent an estimate of consumer premiums.
The 23.7% rise in the bid requires attention. The national bid is used for calculating government subsidies. This figure does not reflect changes in member premiums. The base premium will increase by the statutory maximum of 6%.
Final plan pricing is expected in the middle to latter part of September. CMS Administrator Mehmet Oz stated that the majority of beneficiaries could expect monthly increases of less than $10. Nancy LeaMond, executive vice president at AARP, remarked that it was “too early to know the full impact.” Centers for Medicare & Medicaid Services
Comparing Standalone Part D and Medicare Advantage Drug Plans
| 2026 measure | Standalone PDP | Medicare Advantage MA-PD |
|---|---|---|
| Enrollment | 24.9 million | 31.4 million |
| Average monthly drug premium | $36 | $8 |
| Zero-premium share among non-subsidized members | 28% | 79% |
| Market leader | Centene, 35% | UnitedHealth, 26% |
The current premium disparity gives an advantage to Medicare Advantage drug plans, which have an average drug premium of $8, compared with $36 for standalone plans. Medicare Advantage providers are able to apply rebate dollars to reduce drug premiums, an option not available to standalone plan sponsors.
Humana’s recent results highlight the importance of that hedge. The company’s individual Medicare Advantage enrollment increased by 23% in the quarter. CEO Jim Rechtin stated that this growth would “further fuel” the company’s earnings potential. Humana reaffirmed its adjusted earnings outlook for 2026 at a minimum of $9 per share. Reuters
Insurer stocks during Friday afternoon session
| Company | Price | Thursday’s Change |
|---|---|---|
| Centene | $61.88 | up 1.7% |
| Humana | $367.56 | up 0.2% |
| CVS Health | $105.46 | up 0.2% |
| UnitedHealth | $419.49 | down 0.5% |
Recent trades took place around 1:07 p.m. EDT.
The trading activity does not reflect a broad policy-driven sector selloff. That remains an assumption rather than definitive evidence. Insurers also reacted to earnings announcements over the week. Centene’s larger gain on Friday came after recent swings tied to Medicaid outlook concerns.
Risks: September premiums might increase by less than anticipated. Beneficiaries may choose other standalone plans instead of moving into Medicare Advantage. Employer-group participants often do not have control over these decisions. Migration to Medicare Advantage can also raise medical-cost risks. Centene forecasts an 8% to 9% drop in Medicaid membership for the year.
