New York, January 28, 2026, 21:11 EST — Market closed
- Humana shares dropped 6.7% on Wednesday, deepening a steep decline over the past two days
- CMS put forward a net average payment boost of 0.09% for Medicare Advantage plans in 2027
- Investors are turning their attention to the Feb. 11 results and the April 6 final rate notice for clearer signals
Humana (HUM.N) shares fell 6.69% to close at $194.01 on Wednesday, deepening losses amid a broader selloff triggered by U.S. Medicare Advantage payment proposals. 1
This move is significant since Humana relies heavily on Medicare Advantage, the private plans that substitute traditional Medicare. The government’s yearly payment update directly influences pricing, benefits, and profit forecasts.
Traders now face a calendar crunch as much as a valuation challenge. Rate-setting for 2027 is bumping up against insurer earnings and early discussions around benefit design for the upcoming cycle.
The Centers for Medicare & Medicaid Services unveiled proposed 2027 policies that suggest a net average year-over-year payment rise of 0.09%, totaling over $700 million. CMS framed the plan as a move to enhance payment accuracy. Administrator Mehmet Oz described the proposal as “about making sure Medicare Advantage works better for the people it serves.” 2
The headline figure doesn’t tell the full story. CMS noted that factoring in estimated Medicare Advantage risk score trends—affected by coding shifts and population changes—the anticipated average payment increase would be 2.54%. It set February 25 as the deadline for comments and plans to release the final rates on April 6. 3
Investors had braced for a bigger move. “People were ballparking this flat rate to be closer to 4 to 5%,” said Kevin Gade at Bahl & Gaynor, noting that margins and earnings forecasts would likely suffer. Morningstar’s Julie Utterback pointed to the key question: will CMS revise its assumptions before the final notice? AHIP spokesperson Chris Bond flagged that keeping funding flat amid rising medical usage would squeeze both benefits and costs. 4
Analysts largely saw the proposal as added pressure on an already struggling sector. Michael Ha of Baird noted that the gap between rates and costs “will likely be insufficient and require significant benefit reductions or plan exits.” Lance Wilkes at Bernstein pointed to the danger of sluggish growth as plans scale back benefits. Whit Mayo from Leerink described the update as “generally” an improvement once finalized. 5
UnitedHealth’s earnings and guidance weighed on sentiment. The insurer projects revenue to drop in 2026. Its UnitedHealthcare division warned it could face “very meaningful benefit reductions” and might have to reevaluate its footprint if the Medicare proposal goes through, highlighting the challenges across the company. 6
Humana is set to release its fourth-quarter results on February 11, with the report scheduled for 6:00 a.m. ET. The company plans to host a conference call at 8:00 a.m. ET to go over its 2026 guidance. 7
But there’s a fork ahead. CMS often revises its preliminary numbers, and investors are wagering that the final announcement might come in higher—or at least ease up on the proposed risk-score and diagnosis rules. If not, the downside is clear: stricter payments combined with persistent medical costs could force benefit cuts, shrink markets, and dampen earnings. 8
Investors are eyeing insurer earnings over the next two weeks, with the comment deadline set for February 25. The April 6 final rate notice looms as the next major catalyst for Humana and other Medicare Advantage players.
