NEW YORK, Jan 28, 2026, 11:15 EST — Regular session
- UnitedHealth shares climbed roughly 3% Wednesday, following a steep drop of nearly 20% the day before.
- Investors are reevaluating earnings potential after a softer 2026 revenue forecast and a nearly flat Medicare Advantage payment update for 2027.
- Coming up next is the government’s final Medicare Advantage rate announcement, set for early April.
Shares of UnitedHealth Group Incorporated climbed roughly 3% to $291.23 in Wednesday morning trading, recovering from an intraday low close to $282 following a steep drop on Tuesday.
The rebound fails to wipe away the fresh baseline investors received just a day earlier. On Tuesday, UnitedHealth projected 2026 revenue exceeding $439.0 billion, following 2025 revenue of $447.6 billion. CEO Stephen Hemsley noted the company closed 2025 “as a much stronger company.” (Unitedhealthgroup)
Washington acted quickly. The U.S. proposed a modest 0.09% hike in 2027 payments to private insurers handling Medicare Advantage plans. CMS Administrator Mehmet Oz framed the move as an effort to make Medicare Advantage “work better for the people it serves.” Kevin Gade, COO at Bahl & Gaynor, which owns UnitedHealth shares, noted the market had been expecting a bump closer to 4 to 5%. (Reuters)
The rate shock triggered a sharp sell-off in managed-care stocks Tuesday. Baird’s Michael Ha warned the move could lead to “benefit reductions or plan exits.” Bernstein’s Lance Wilkes flagged that “membership growth will remain low” if the figures hold, while Leerink’s Whit Mayo dismissed the proposal as “well below expectations.” (Reuters)
UnitedHealth added pressure with its latest forecast. The company expects revenue to drop for the first time since 1989, projecting adjusted profit over $17.75 per share in 2026. It also set the 2026 medical care ratio—premiums allocated to medical claims—at roughly 88.8%. CEO Tim Noel warned that plans may require “very meaningful benefit reductions.” Investor James Harlow of Novare Capital flagged the Medicare proposal as a risk to 2027 earnings growth, while Morningstar’s Julie Utterback noted that “a quick turnaround may have to wait longer.” (Reuters)
This is now a calendar trade. CMS will release the final Medicare Advantage capitation rates and payment rules for 2027 by April 6, with comments on the advance notice due by Feb. 25. (CMS)
Peers continue to influence trading. On Wednesday, Elevance Health projected 2026 profits below expectations, warning that high medical costs will continue to pressure insurers. CEO Gail Boudreaux described 2026 as a “year of execution and repositioning.” (Reuters)
That rebound in UNH might not last. Should final Medicare Advantage rates hold close to the proposal and medical expenses climb beyond what insurers budgeted, the sector could respond by cutting benefits, narrowing networks, or retreating from certain markets — strategies that safeguard margins but threaten membership and expansion.
Traders are focused on two key points: whether the government eases its rate proposal and how UnitedHealth adjusts plan offerings and pricing following a year marked by higher utilization and restructuring costs.
