New York, Jan 27, 2026, 18:39 EST — After-hours
- Humana shares plunged over 20% amid a broader selloff in U.S. health insurers triggered by concerns over Medicare Advantage rates.
- A draft update for 2027 payments indicated modest growth and stricter limits on diagnosis data that influence payment calculations.
- Attention now turns to the public comment period and Humana’s upcoming earnings report for insights on margins and plan pricing.
Humana Inc (HUM) shares tumbled 21.1% to $207.93 in after-hours trading Tuesday, following a steep sell-off earlier in the session. The stock swung between $231.79 and $206.25 during the day, with roughly 10.4 million shares changing hands.
The decline had implications beyond just today’s trading. Medicare Advantage, a privately managed alternative to traditional Medicare, pays insurers a set amount per enrollee from the government — even a slight tweak in that payment rate can quickly alter profit calculations.
The Centers for Medicare & Medicaid Services released a draft 2027 rate notice that would raise average payments by 0.09%, adding just over $700 million before factoring in risk score adjustments tied to diagnosis coding and population changes. CMS also proposed stricter rules on diagnosis data used in “risk adjustment,” the system that allocates more funds for sicker patients. Comments are due by Feb. 25, with a final ruling expected by April 6. (CMS)
U.S. health insurer stocks tumbled after the news, with traders earlier bracing for about $80 billion in market value to vanish. Analysts had been expecting a payment hike of up to 6%. Baird’s Michael Ha flagged the draft update could trigger “significant benefit reductions or plan exits.” Bernstein’s Lance Wilkes warned that “membership growth will remain low,” while Leerink’s Whit Mayo described the proposal as “well below expectations.” (Reuters)
Humana hit nearly $206, a peak last reached in 2017, as investors adjusted their 2027 expectations for the sector. UnitedHealth dragged shares lower after flagging its first annual revenue drop in years. (Reuters)
Humana now faces the challenge of balancing growth with rising costs in Medicare Advantage as coding and quality regulations become stricter. Investors will watch closely for signs the company might trim its county coverage, adjust benefits, or push its CenterWell care units more aggressively to reduce hospital visits.
Setting aside the rate discussion, virtual-care provider Carda Health announced Monday a new partnership with Humana to deliver at-home cardiac rehabilitation across the country. Carda CEO Harry DiFrancesco highlighted that “cardiac rehabilitation makes a meaningful difference,” though the stock’s movement remained focused on the Medicare numbers. (Carda Health)
That rate notice is just a proposal—CMS can still tweak it after hearing from the industry. A stronger final update in April would help relieve some strain. But the downside for Humana is clear: lower payments, rising medical claims, and sluggish enrollment if plans are forced to trim benefits.
Investors are shifting focus to Humana’s fourth-quarter earnings and 2026 forecast, set for release before the bell on Feb. 11. The company will also hold a morning call that day. The stock’s movement will likely hinge on projections for Medicare Advantage — including pricing, benefits, and margin goals. (Humana Health Policy Center)
