New York, Jan 29, 2026, 14:38 EST — Regular session
Elevance Health (ELV) shares climbed roughly 1% to $345.44 Thursday afternoon, extending a bounce in U.S. managed-care stocks following a volatile two-day stretch driven by policy news and earnings reports. UnitedHealth edged up 0.1%, Humana jumped 1.8%, and CVS Health rose 0.4%.
This shift is crucial since the group’s valuation hinges on government formulas, not only on quarterly earnings. Medicare Advantage and Affordable Care Act plans respond sharply to minor policy shifts. Investors remain uncertain about what “normal” medical usage will settle at after two years of unusually high demand.
Elevance is caught in the thick of it. The company sells Medicare and Medicaid coverage, operates ACA plans, and is expanding its services division. Any change in reimbursement rates or enrollment numbers quickly impacts its earnings.
On Wednesday, Elevance forecast 2026 adjusted diluted EPS of at least $25.50, with GAAP EPS expected to hit at least $22.30, following a fourth-quarter operating revenue of $49.3 billion and adjusted EPS of $3.33. The company’s benefit expense ratio—the portion of premiums spent on medical care—stood at 93.5% for the quarter. Carelon’s revenue climbed 27% to $18.7 billion. CEO Gail Boudreaux said Elevance anticipates returning to at least 12% adjusted EPS growth in 2027. 1
Near-term outlook looks tough. Elevance’s 2026 adjusted profit estimate of at least $25.50 a share falls short of analysts’ $26.90 consensus. The company expects revenue to decline as it faces Medicaid headwinds and a tougher ACA plan mix, Reuters reported. It also projects a 2026 medical loss ratio around 90.2%, plus or minus 50 basis points. Leerink analyst Whit Mayo noted the “guidance reflects continued pressure in Medicaid,” while Allen Coker of Manning & Napier called it a “‘show me’ story” when it comes to pricing and margin recovery. 2
Washington adds another twist. The government suggested a mere 0.09% bump in Medicare Advantage payments for 2027 and tweaks to risk adjustment — the method that pays insurers more when patients have serious conditions — moves that unsettled the sector this week. CMS Administrator Mehmet Oz described the proposal as an effort to modernize risk adjustment and shield taxpayers. Kevin Gade, COO of Bahl & Gaynor, said investors had been “ballparking” a rise closer to 4% to 5%. 3
ACA enrollment for 2026 dropped to roughly 23 million after enhanced subsidies ended and premiums rose sharply, a Reuters report shows. Evercore ISI’s Elizabeth Anderson flagged “strong disenrollment activity” during the 90-day grace period, noting some auto-enrolled members aren’t paying. Michael Ha of Baird added the market probably won’t get a clear picture until early April. 4
Traders are zeroing in on three key signals: medical use, pricing discipline, and whether membership sticks in critical areas. Elevance’s upcoming decisions on plan pricing and cost management will be under scrutiny, along with fresh clues about Carelon’s growth and profitability.
The next key date is Feb 25, when comments on the 2027 Medicare Advantage advance notice are due. CMS plans to release the final rate announcement by April 6. 5
