New York, January 27, 2026, 05:08 EST — Premarket
- Humana shares were set to drop roughly 12% in premarket action following a U.S. proposal that suggested Medicare Advantage payment growth in 2027 would be minimal.
- CMS proposed tougher limits on risk scores, restricting diagnoses that come from unlinked chart reviews.
- Investors are closely monitoring insurer earnings calls alongside the April 6 final rate notice for any hints of a shift in the proposal.
Humana Inc (HUM.N) shares dropped roughly 12% in premarket trading Tuesday, leading a broad selloff among U.S. health insurers following a Medicare Advantage payment proposal that fell well short of Wall Street’s estimates. In extended hours, Humana was last seen near $231. 1
The annual Medicare Advantage rate notice is a Washington update that can swiftly upend earnings forecasts. It establishes the baseline payments private insurers receive to manage government-backed plans for seniors and people with disabilities—and it directly influences the benefits they’re able to provide.
The Centers for Medicare & Medicaid Services announced its proposed payment policies for 2027, aiming for a net average increase of 0.09%, which amounts to over $700 million. The agency framed the package as a move toward improved “payment accuracy” and updating the risk-adjustment framework. CMS Administrator Dr. Mehmet Oz said the intent is to make Medicare Advantage “work better for the people it serves.” 2
CMS reported an effective growth rate of 4.97%, but that gain was mostly wiped out by a 3.32% drag from risk-model tweaks and normalization, along with a 1.53% cut from dropping diagnoses tied to unlinked chart reviews. When factoring in estimated risk-score trends influenced by coding and population shifts, the expected average payment change climbs to 2.54%. Comments must be submitted by Feb. 25. 3
This wasn’t just a Humana story. UnitedHealth slipped roughly 9%, and CVS Health also fell about 9% in early trading. UnitedHealth’s drop alone weighed heavily on the Dow. A JPMorgan analyst pointed out that the preliminary Medicare Advantage rate notice has typically been revised upward in recent years—a detail bulls will likely hold on to. 4
Insurers and investors are focused on a tough downside: if the proposal stands and medical-cost inflation persists, plans might need to slash benefits or hike member charges to maintain margins. A trade group for the health insurance industry cautioned that keeping funding flat amid rising expenses could force benefit reductions and push out-of-pocket costs higher for about 35 million Medicare Advantage enrollees. 5
Humana pushed forward with some company-specific updates on Monday, announcing a partnership with Carda Health to broaden access to virtual cardiac rehab. The goal: tackle obstacles like transportation and scheduling. “Our collaboration with Carda Health is helping to remove barriers,” said Dr. Alex Ding, Humana’s deputy chief medical officer. 6
Humana is set to report its fourth-quarter results on Feb. 11. The company will hold a live Q&A that morning, where it plans to discuss earnings guidance for 2026. 7
Traders are now focused on any near-term signals from insurers about the proposal, starting with this week’s earnings calls. “People were ballparking this flat rate to be closer to 4 to 5%,” said Kevin Gade, chief operating officer at Bahl & Gaynor. CMS is set to release the final rate announcement on April 6. 8
