New York, January 28, 2026, 12:47 PM EST — Regular session
- CVS Health shares climbed roughly 2.2% to $73.55, clawing back some of Tuesday’s losses
- The rebound follows a proposed 2027 Medicare Advantage rate update that shook managed-care stocks
- Investors are eyeing the final CMS rate notice due April 6, along with CVS’ earnings call from February 10
Shares of CVS Health Corp ticked up Wednesday, following a steep 14% drop the previous day amid a widespread selloff in U.S. health insurers triggered by Medicare Advantage reimbursement concerns. 1
This move is significant since CVS’ Aetna unit holds a big stake in Medicare Advantage. The government’s early peek at 2027 payments has shaken up what insurers expect to make on seniors’ plans. When the numbers don’t add up, insurers typically cut benefits or retreat from less profitable markets.
The Centers for Medicare & Medicaid Services has proposed a modest 0.09% increase in Medicare Advantage rates for 2027. The update takes into account cost trends, 2026 quality ratings, and adjustments to the risk-adjustment model—a system that compensates insurers more for sicker members. 2
CMS Administrator Mehmet Oz outlined that the proposed policies target improvements in Medicare Advantage to better serve beneficiaries, while updating risk adjustment and shielding taxpayers from excess costs. 2
Kevin Gade, chief operating officer at Bahl & Gaynor, noted that investors had been “ballparking” a rate around 4% to 5% amid rising costs and utilization, warning that this shortfall could squeeze margins through 2027. 2
Morningstar analyst Julie Utterback noted the industry’s focus on whether CMS will revise its assumptions ahead of finalizing the rule. “We’ll see where the agency winds up,” she said. 2
The government projects that the 0.09% hike will add over $700 million in payments by 2027. However, Utterback pointed out the proposal doesn’t factor in the government’s anticipated 2.45% boost tied to coding. 2
CVS pushed higher Wednesday, echoing steadier trading in managed-care stocks following Tuesday’s steep slide. Investors mulled over the possibility that the final notice might ease up, while also gauging how fast insurers can adjust 2027 benefit pricing.
The downside is clear: if the final rate hovers near the current proposal and medical costs remain high, insurers might see their earnings forecasts squeezed further, while benefit cuts risk sparking political backlash. America’s Health Insurance Plans cautioned that if the proposal goes through, seniors could face higher costs and fewer benefits when they renew coverage in October 2026. 2
All eyes on CVS turn to management’s take on medical cost trends and Medicare Advantage margins when it announces earnings. The company plans to host its fourth-quarter and full-year 2025 earnings call on Feb. 10 at 8:00 a.m. ET. 3
The group’s next major policy milestone is April 6, the date CMS plans to release the final Medicare Advantage rates for 2027. 2
