Shares of several medicare insurers including UnitedHealth Group Inc ( UNH ) , Humana Inc ( HUM ) and CVS Health Corp ( CVS )  are trading lower in Monday’s after-hours session after the Centers for Medicare & Medicaid Services (CMS) finalized payment updates.

What Happened: The CMS announced Monday that it finalized the calendar year 2025 Rate Announcement for the Medicare Advantage (MA) and Medicare Part D Prescription Drug (Part D) programs that updates payment policies for these programs and ensures payment accuracy. 

Under the new Rate Announcement, payments from the government to MA plans are expected to increase by 3.7% on average from 2024 to 2025. The federal government is also projected to pay between $500 and $600 billion in MA payments to private health plans in 2025.

The CMS also said it is finalizing improvements to the structure of the Medicare Part D drug benefit for 2025 that will result in lower drug costs. Annual out-of-pocket costs will be capped at $2,000 for people with Medicare Part D in 2025.

"Thanks to the President’s lower cost prescription drug law, the Inflation Reduction Act, millions of people with Medicare Part D will see even lower costs next year. Your out-of-pocket costs for prescription drugs will be limited to no more than $2,000, keeping more of your money in your pocket," said U.S. Department of Health and Human Services Secretary Xavier Becerra.

"In addition to improving the Part D drug benefit, we are updating payments to Medicare managed care plans for people who rely on these plans. The Biden-Harris Administration will continue to work on lowering health care costs for all Americans, fulfilling a promise the President made."

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UNH, HUM, CVS Price Action: In after-hours trading on Monday, UnitedHealth ( UNH ) shares were down 5.04%, Humana shares were down 8.66% and CVS shares were down 5.63% on the news, according to Benzinga Pro.