Healthcare ETFs Gain Attention Amid Medicare Policy Uncertainty
Written by Emily J. Thompson, Senior Investment Analyst
Source: Benzinga
- Policy Risk Mitigation: Investors are shifting towards broad-based healthcare ETFs to diversify risks associated with managed care stocks due to uncertainty over Medicare Advantage payment rates, thereby stabilizing their portfolios amid policy-driven volatility.
- Medicare Payment Rate Outlook: The U.S. Centers for Medicare & Medicaid Services (CMS) indicated that the average reimbursement rate for Medicare Advantage will only increase by 0.09% in 2027, significantly below the expected 4% to 6%, which could adversely affect insurers' profitability.
- UnitedHealth Earnings Warning: UnitedHealth Group (UNH) reported adjusted earnings of $2.11 per share for Q4 2025, down 69% from last year but slightly above consensus, revealing a medical care ratio increase to 89.1%, indicating pressure on profitability.
- Investor Focus: With reimbursement policies remaining unclear, healthcare ETFs are seen as a strategic middle ground that allows investors to maintain exposure to long-term growth in the healthcare sector without being overly sensitive to policy changes.
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Analyst Views on ABBV
Wall Street analysts forecast ABBV stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for ABBV is 253.26 USD with a low forecast of 218.00 USD and a high forecast of 289.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
22 Analyst Rating
15 Buy
7 Hold
0 Sell
Moderate Buy
Current: 218.670
Low
218.00
Averages
253.26
High
289.00
Current: 218.670
Low
218.00
Averages
253.26
High
289.00
About ABBV
AbbVie Inc. is a global, diversified research-based biopharmaceutical company. It is engaged in research and development, manufacturing, commercialization and sale of medicines and therapies. Its product portfolio includes Immunology, Oncology, Aesthetics, Neuroscience, Eye Care and Other Key Products. Immunology products include rheumatology, dermatology and gastroenterology. Oncology products include Imbruvica, Venclexta/Venclyxto, Elahere and Epkinly. Aesthetics portfolio consists of facial injectables, plastics and regenerative medicine, body contouring, and skincare products. Its Neuroscience products include Botox Therapeutic, Vraylar, Duopa and Duodopa, Ubrelvy, and Qulipta. Eye Care products include Ozurdex, Lumigan/Ganfort, Alphagan/Combigan, Restasis, and other eye care. Other key products include Mavyret/Maviret, Creon, and Linzess/Constella. Its investigational candidate, bretisilocin, is for the treatment of patients with moderate-to-severe major depressive disorder (MDD).
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
AbbVie Achieves Remarkable Growth in 2025
- Stock Performance: In 2025, AbbVie’s stock surged nearly 29%, significantly outperforming the S&P 500's 16% gain, reflecting strong investor confidence and market recognition of the company's future prospects.
- Sales Breakthrough: The blockbuster drugs Skyrizi and Rinvoq generated a staggering $24 billion in sales in 2025, effectively offsetting the impact of Humira's patent expiration and solidifying AbbVie’s leadership in the pharmaceutical sector.
- Diverse Revenue Streams: AbbVie excelled in neuroscience, with Vyralar achieving a nearly 7% year-over-year sales increase to $931 million in Q3 2025, highlighting the company's growth potential across multiple sectors.
- Active Acquisitions and Partnerships: AbbVie acquired Capstan Therapeutics and entered into a collaboration with China’s Simcere Zaiming, enhancing its research capabilities in autoimmune therapies and demonstrating a strategic intent to expand its portfolio.
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Healthcare ETFs Gain Attention Amid Medicare Policy Uncertainty
- Policy Risk Mitigation: Investors are shifting towards broad-based healthcare ETFs to diversify risks associated with managed care stocks due to uncertainty over Medicare Advantage payment rates, thereby stabilizing their portfolios amid policy-driven volatility.
- Medicare Payment Rate Outlook: The U.S. Centers for Medicare & Medicaid Services (CMS) indicated that the average reimbursement rate for Medicare Advantage will only increase by 0.09% in 2027, significantly below the expected 4% to 6%, which could adversely affect insurers' profitability.
- UnitedHealth Earnings Warning: UnitedHealth Group (UNH) reported adjusted earnings of $2.11 per share for Q4 2025, down 69% from last year but slightly above consensus, revealing a medical care ratio increase to 89.1%, indicating pressure on profitability.
- Investor Focus: With reimbursement policies remaining unclear, healthcare ETFs are seen as a strategic middle ground that allows investors to maintain exposure to long-term growth in the healthcare sector without being overly sensitive to policy changes.
Continue Reading