New York, Jan 29, 2026, 18:11 EST — After-hours
- UnitedHealth shares slipped roughly 0.6%, closing at $292.29 in after-hours trading
- The U.S. Labor Department has proposed a rule requiring pharmacy benefit managers to reveal fees and compensation details
- Investors are zeroing in on Medicare Advantage rate-setting, eyeing crucial deadlines in February and April
Shares of UnitedHealth Group Incorporated slipped 0.6% to $292.29 in after-hours trading Thursday. Earlier, the stock fluctuated between $289.31 and $295.94. Investors reacted to a fresh U.S. proposal aimed at tightening disclosure rules for pharmacy benefit managers, a segment where UnitedHealth’s OptumRx holds significant sway. (Reuters)
Regulatory pressure is hitting UnitedHealth hard, given its reliance on government-backed health plans and drug-benefit intermediaries. Both sectors face scrutiny in Washington, and after insurer valuations took a steep hit earlier this week, traders are running low on patience.
Pharmacy benefit managers, known as PBMs, operate at the core of the drug supply chain, handling price negotiations and managing formularies for health plans. Stricter disclosure rules could tighten margins, alter contract terms, and bring increased scrutiny well before any final decisions are made.
The Labor Department announced a proposed rule mandating PBMs reveal details like manufacturer rebates, compensation tied to the difference between plan payments and pharmacy reimbursements, and some payments clawed back from pharmacies. The department said comments must be submitted within 60 days after the rule’s Jan. 30 publication in the Federal Register. (DOL)
Late trading saw mixed action among related stocks. CVS Health edged up 0.5%, whereas Cigna slipped 0.4%. Humana, which focuses on Medicare, climbed 1.3%, and Elevance added 1.4%.
The PBM proposal arrives as insurers continue to absorb a nearly flat update to Medicare Advantage payments for 2027 — the government’s rates to private insurers managing Medicare plans. CMS said this week’s proposal points to a net average payment increase of just 0.09%, amounting to over $700 million. Still, the agency flagged a higher “expected average change” when factoring in risk score trends. (Centers for Medicare & Medicaid Services)
Analysts cautioned that even a slight miss on cost trends might trigger tough choices. Baird’s Michael Ha noted the proposed rates “will likely be insufficient,” potentially leading to “benefit reductions or plan exits.” Bernstein’s Lance Wilkes warned that “membership growth will remain low” if benefits are cut and networks tightened. Leerink’s Whit Mayo called the update “well below expectations.” (Reuters)
UnitedHealth shifted focus back to its core operations after a 2026 forecast that left some investors underwhelmed. On Jan. 27, the company projected 2026 revenue topping $439.0 billion, with adjusted earnings exceeding $17.75 per share. CEO Stephen Hemsley said the firm “confronted challenges directly” and “finished 2025 as a much stronger company.” (UnitedHealth Group)
UnitedHealthcare’s top brass have raised concerns about Medicare Advantage if rates remain low. CEO Tim Noel labeled the rate proposal “disappointing” and warned, “We will need very meaningful benefit reductions” as the company reevaluates its product lineup and geographic reach. The firm also highlighted rising medical costs, noting its medical care ratio—the portion of premiums spent on care—hovers near 89%. (Reuters)
Peers face similar challenges. Elevance, with significant exposure to Medicare Advantage and government-backed plans, predicted 2026 profits below Wall Street forecasts on Wednesday. The company described 2026 as “a year of execution and repositioning,” noting that medical costs are expected to remain elevated. (Reuters)
The downside scenario isn’t set in stone. Medicare Advantage rates often change from initial proposals to the final rule, and industry pushback can be fierce. PBM disclosure rules also usually evolve during the comment period. If the final terms hold near the proposals and medical utilization remains high, margins would likely feel the squeeze first.
Investors now turn their attention to Washington’s schedule: CMS is accepting comments on the 2027 Medicare Advantage proposal through Feb. 25, with a final rate announcement set for no later than April 6. Meanwhile, the Labor Department’s PBM proposal has kicked off a 60-day comment period following its Federal Register release.
