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Medicare Shock Sends UnitedHealth, Humana And CVS Tumbling

The Centers for Medicare & Medicaid Services (CMS) on Monday outlined proposed methodological and payment policy updates for Medicare Advantage that point to modest payment growth in 2027 while emphasizing program sustainability, accuracy, and administrative simplicity.

Notable U.S. health insurers are under pressure after the update, including:

Alignment Healthcare, Inc. (NASDAQ:ALHC)

Centene Corporation (NYSE:CNC)

CVS Health Corporation (NYSE:CVS)

Elevance Health, Inc. (NYSE:ELV)

Humana Inc. (NYSE:HUM)

Molina Healthcare Inc. (NYSE:MOH)

UnitedHealth Group Inc. (NYSE:UNH)

CMS released its Calendar Year 2027 Advance Notice of Methodological Changes for Medicare Advantage capitation rates and Part C and Part D payment policies, a required annual process used to update payment rates and refine technical assumptions.

If finalized, the proposals would result in a net average year-over-year payment increase of mere 0.09%, translating to more than $700 million in additional payments to Medicare Advantage plans.

Citing analysts, the Wall Street Journal noted that it was estimated that the Medicare agency would propose a 2027 rate increase of roughly between 4% and 6%.

The WSJ report on Monday highlighted that the proposed rates came in below Wall ...