New York, January 30, 2026, 11:20 ET — Regular session
- Shares of UnitedHealth Group dropped roughly 2% in late-morning trading, extending losses following this week’s selloff.
- Investors remain fixated on Washington’s proposed 2027 Medicare Advantage payment update and its potential impact on margins that year.
- The next catalyst arrives as the government’s comment period ends Feb. 25, followed by the release of final 2027 rates on April 6.
Shares of UnitedHealth Group Incorporated dropped 2.1% to $286.12 in late-morning trading on Friday, extending losses following a steep correction earlier this week. The Dow component closed Thursday at $292.29.
The pullback zeroed in on Medicare Advantage, the private Medicare alternative where insurer profits depend heavily on government payments aligning with medical costs. Baird analyst Michael Ha cautioned that the gap versus cost trends “will likely be insufficient” unless plan options toughen up. (Reuters)
CMS projected its 2027 update would yield a net average payment boost of 0.09%, translating to over $700 million. Factoring in estimated risk-score trends, the expected average increase rises to 2.54%. Comments must be submitted by 11:59 p.m. ET on Feb. 25. The agency plans to release the 2027 rate announcement by April 6 at the latest. (CMS)
In a separate announcement, CMS positioned the proposal as an effort to improve payment accuracy and tighten risk adjustment, which increases payments to plans covering sicker patients. “These proposed payment policies are about making sure Medicare Advantage works better for the people it serves,” CMS Administrator Dr. Mehmet Oz said. (CMS)
UnitedHealth pushed to steady the narrative. It forecast 2026 revenue topping $439 billion and adjusted earnings exceeding $17.75 per share, following 2025 revenue of $447.6 billion. “We confronted challenges directly,” CEO Stephen Hemsley said in the release. (UnitedHealth Group)
This week, UnitedHealthcare spotlighted some key operational updates. On Thursday, the company shared fresh data on its AI-driven “Benefit Assist” program, revealing it automated nearly four times as many supplemental health payments compared to plans without the tool. “During a major life event, no one should have to wonder whether they’re eligible,” said Stephen Wilson, CEO of UnitedHealthcare Specialty. (UnitedHealth Group)
Wall Street remains cautious, watching for signs the earnings rebound can endure amid tight government funding. UnitedHealth projects its 2026 medical care ratio—the portion of premiums used for medical care—around 88.8%, Reuters reported. Morningstar analyst Julie Utterback warned that “investors hoping for a quick turnaround may have to wait longer than hoped.” (Reuters)
Analysts are moving quickly to update their forecasts. UBS lowered its price target to $410 from $430 but maintained a buy rating, citing uncertainty over the 2027 rate-setting process and possible shifts in competition within the sector, according to an Investing report.
The downside is straightforward: if medical costs keep climbing and final Medicare Advantage rates remain near the proposed levels, insurers could face pressure on margins. That might force them to cut benefits, narrow provider networks, or scale back plan offerings.
In late-morning trading, peers showed a mixed-to-lower trend. Humana slipped roughly 0.6%, CVS dropped close to 0.8%, and Elevance fell about 0.3%. Molina took a sharper hit, sliding over 3%, according to market data.
UnitedHealth traders are eyeing key dates on the CMS calendar. The comment deadline on Feb. 25 looms as a crucial checkpoint, while the final-rate announcement on April 6 could shift expectations once more.
