New York, Jan 27, 2026, 18:05 EST — After-hours
- Elevance Health shares plunged roughly 14% in late trading following a steep sell-off earlier in the session.
- CMS’s nearly flat 2027 Medicare Advantage payment update shook managed-care stocks.
- On Wednesday, investors will focus on Elevance’s results for insights into pricing and costs.
Elevance Health Inc shares dropped 14.3% to $322.92 in after-hours trading Tuesday, following an opening price of $351.60 and hitting a low of $320.45 during the day.
The drop follows U.S. health insurers revising their forecasts for Medicare Advantage, the privately managed Medicare plans serving seniors and individuals with disabilities.
Medicare Advantage is the battleground for these companies, with membership at stake and small changes in federal payment rules capable of swinging profits. When the numbers get tight, plans typically cut back on “extras” such as dental or vision benefits, restrict doctor networks, or accept narrower margins.
The Centers for Medicare & Medicaid Services announced its 2027 advance notice, projecting a net average payment increase of 0.09%, totaling over $700 million. Factoring in the expected risk-score “trend”—a technical factor linked to coding and demographic shifts—the average payment change rises to 2.54%. CMS set a Feb. 25 deadline for public comments ahead of the final rate decision expected by April 6. 1
CMS Administrator Dr. Mehmet Oz described the proposal as focused on “making sure Medicare Advantage works better for the people it serves.” The agency aims to update risk adjustment—the method that increases payments to plans for sicker patients. Starting in 2027, CMS also suggests excluding diagnoses from unlinked chart review records, meaning those not connected to a specific patient encounter, from risk-score calculations. 2
The rate shock hit a sector already under strain. According to a Reuters tally, the group is set to lose about $80 billion in market value Tuesday, with UnitedHealth dropping nearly 20%, and Humana and CVS also tumbling sharply. Baird analyst Michael Ha said the update “will likely be insufficient” against rising medical costs. Bernstein’s Lance Wilkes added, “If rates are in this range, membership growth will remain low.” 3
Some investors expected a bigger boost. “People were ballparking this flat rate to be closer to 4 to 5%,” said Kevin Gade, chief operating officer at Bahl & Gaynor, in a Reuters report. Morningstar analyst Julie Utterback noted the market will be watching closely to see if the agency revises its assumptions before finalizing the rates. 4
Elevance faces tricky timing. It’s set to release its Q4 and full-year 2025 results Wednesday at 6:00 a.m. EST, followed by a conference call at 8:30 a.m. EST. 5
Investors might have to bypass this week’s data and focus directly on 2027 bids. A slightly improved final rate in April won’t do much if medical use remains strong or pricing pressure stays fierce.
On the flip side, the proposal remains tentative. Insurers frequently contend that headline rates overlook other shifting elements, such as how members’ risk scores get calculated and how plans tweak benefits and networks as time goes on.
Next up: Elevance’s earnings report and outlook drop Wednesday morning. After that, the CMS comment period runs through Feb. 25, with the final Medicare Advantage rates set to be announced by April 6.
