NEW YORK, Jan 28, 2026, 09:32 EST — Regular session
- UnitedHealth shares gained 1.2% early Wednesday, bouncing back from a 19.6% drop in the previous session
- A draft update to Medicare Advantage rates, combined with UnitedHealth’s 2026 outlook, sparked a widespread selloff in insurer stocks
- All eyes are on the final Medicare Advantage rate notice, set for release April 6
UnitedHealth Group Incorporated (UNH) shares ticked up 1.2% to $286.15 in early trading Wednesday, a tentative rebound following a nearly 20% plunge the day before. Despite the gain, the stock remains down roughly 47% over the past year. (Investing)
This move is a big deal because Washington just set a new target for Medicare Advantage—the private plans for seniors that drive profits for major insurers. The Centers for Medicare and Medicaid Services floated a 0.09% average bump in 2027 payments, well short of the 4 to 5% increase many had expected. They also signaled tweaks to the risk-adjustment model, which pays insurers more when their members are sicker. Kevin Gade, COO at Bahl & Gaynor, which holds UnitedHealth stock, said, “People were ballparking this flat rate to be closer to 4 to 5%.” (Reuters)
Tuesday saw a sharp selloff in managed care stocks after the draft rates and UnitedHealth’s outlook came out, Reuters reported, threatening to erase roughly $80 billion from the group’s total market value. Baird analyst Michael Ha flagged that the proposed rates compared to cost trends “will likely be insufficient,” suggesting some plans might have to cut benefits or even pull out. (Reuters)
UnitedHealth reported $447.6 billion in revenue for full-year 2025 on Tuesday, with a forecast for 2026 revenue to dip just below $439.0 billion. The company said this reflects a 2% pullback as it “right-sizes” its operations. It expects adjusted earnings to top $17.75 per share. A sizable fourth-quarter charge hit the books: $1.6 billion after tax, or $1.78 per share. That included $799 million related to final cyberattack costs and $2.521 billion tied to restructuring and other measures. Meanwhile, Medicare Advantage membership is expected to drop by roughly 1.3 million to 1.4 million next year. (UnitedHealth Group)
Tighter government funding paired with fewer covered lives hits the very model investors scrutinize. UnitedHealth’s medical care ratio, which tracks claims costs against premiums, surged last year. Now, the company is counting on repricing and cost reductions to steady its margins.
The policy outlook remains unsettled. The Medicare Advantage rate proposal is still in draft form. If the final figures don’t improve, or if medical utilization remains elevated, insurers might cut benefits, tighten networks, or exit certain counties altogether. That would weigh on growth and keep earnings estimates in flux.
Early Wednesday, other insurers traded unevenly as investors weighed if Tuesday’s sharp sell-off had overshot. Humana and CVS Health stayed under scrutiny, both linked by their exposure to Medicare Advantage policies.
Investors across the broader market were on edge ahead of the Federal Reserve’s rate announcement due Wednesday, with a slew of megacap earnings reports set to drop after hours. That kept risk appetite jumpy, even as some sectors managed to push higher. (Reuters)
For UnitedHealth, the next major trigger isn’t another management soundbite. It’s the government’s final Medicare Advantage rate announcement on April 6. That will establish the baseline for 2027 plan pricing—and prompt the next batch of earnings revisions.
