According to a report by Bloomberg, health insurers that provide private Medicare Advantage plans will see a less than expected increase in payments in 2017.
Bloomberg reported that the U.S. government will raise its payments to insurers by just 0.85 percent on average, marking a decrease from the 1.35 percent proposed raise in February.
Medicare Advantage plans are operating by privately owned health insurers, but are funded and regulated by the U.S. government.
U.S. healthcare stocks traded lower on Tuesday following the announcement.
Shares of Aetna Inc AET were lower by more than 2 percent after Tuesday's opening bell, while shares of both Centene Corp CNC and Anthem Inc ANTM were lower by more than 1 percent and shares of UnitedHealth Group Inc UNH were lower by around 0.25 percent.
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