New York, Jan 28, 2026, 14:13 EST — Regular session
Elevance Health Inc (NYSE: ELV) shares climbed roughly 6% Wednesday, recovering sharply in afternoon trading. The insurer established a profit floor for 2026 despite forecasting a slight drop in revenue. The stock jumped $20.22 to $343.14, with intraday moves ranging from $293.01 to $347.45.
Investors are scrambling to reassess the managed-care sector following a Medicare Advantage shakeup this week. On Monday, the Centers for Medicare & Medicaid Services proposed a net average payment rise of just 0.09% for 2027. They also unveiled tweaks to the risk-adjustment model, which increases payouts to plans covering sicker patients. (Centers for Medicare & Medicaid Services)
The impact was immediate. On Tuesday, U.S. health insurers saw their market value drop by roughly $80 billion. UnitedHealth plunged nearly 20%, Humana fell close to 19%, and CVS dropped about 11%. Elevance and other insurers slid between 5% and 11%. (Reuters)
Elevance forecasted 2026 adjusted earnings of at least $25.50 per share, with total operating revenue expected to decline by a low single-digit percentage. The company anticipates a benefit expense ratio around 90.2%, plus or minus 50 basis points—a key metric showing the portion of premium dollars spent on medical claims. Year-end medical enrollment is projected between 43.175 million and 43.875 million, including Medicare Advantage members ranging from 1.775 million to 1.875 million, and Medicaid enrollment estimated at 7.65 million to 7.85 million. (SEC)
The company posted steadier fourth-quarter results. Operating revenue climbed to $49.3 billion, with adjusted diluted earnings hitting $3.33 per share. A benefit expense ratio of 93.5% pointed to rising medical costs in its Affordable Care Act plans and seasonal Medicare Part D factors. The firm also returned $4.1 billion to shareholders in 2025, including a $1.72 quarterly dividend set to pay on March 25. (Elevancehealth)
But the guidance hinges on medical costs stabilizing. CEO Gail Boudreaux described 2026 as “a year of execution and repositioning” for Medicaid, Medicare Advantage, and Affordable Care Act plans. CFO Mark Kaye warned the end of enhanced premium tax credits could mean a sicker pool in the marketplace. Elevance projects about two-thirds of adjusted earnings will come in the first half of 2026. Analyst Allen Coker of Manning & Napier labeled it a “show me” story on pricing and margins. LSEG data shows analysts have been targeting $26.90. (Reuters)
That leaves scant room for another surge in utilisation — the frequency with which members access care — before premiums are adjusted.
UnitedHealth, a key player in the sector, warned a day earlier that 2026 revenue might drop for the first time in decades, sending its shares down 19% amid growing worries over Medicare pricing. UnitedHealthcare CEO Tim Noel described the rate plan as “disappointing” and suggested insurers could face “very meaningful benefit reductions” and a leaner footprint if rates stay around this level. (Reuters)
Traders are now focused on policy moves, not upcoming earnings reports.
Comments on the 2027 proposals must be submitted by Feb. 25, with the agency aiming to release a final rate announcement by April 6 — a date investors are closely watching. (Aha)
