New York, Jan 26, 2026, 18:12 ET — After-hours
- UnitedHealth slipped in after-hours trading following the U.S. proposal to raise Medicare Advantage payments by an average of 0.09% for 2027.
- Traders zeroed in on proposed tweaks to risk adjustments that might limit payments linked to specific chart reviews.
- Tuesday’s open is shaping up ahead of UnitedHealth’s report on results and 2026 guidance, scheduled before the bell.
Shares of UnitedHealth Group dropped over 10% in after-hours trading Monday, following a U.S. health official proposal that would barely increase 2027 payments for Medicare Advantage plans.
The rate notice is crucial because Medicare Advantage — the privately run alternative to traditional Medicare — fuels growth for major insurers and provides consistent cash flow. Even a slight tweak in the annual payment calculations can ripple through pricing models well before it impacts income statements.
It thrusts risk adjustment back into focus. This payment formula increases reimbursements when plans report sicker patients, a contentious issue in Washington since it can drive up federal spending.
The Centers for Medicare & Medicaid Services unveiled proposed 2027 policies that would drive a modest year-over-year payment bump of 0.09%, translating to over $700 million in extra Medicare Advantage funding if the plan is finalized. CMS Administrator Dr. Mehmet Oz described the proposal as focused on “making sure Medicare Advantage works better for the people it serves.” The agency set a Feb. 25 deadline for public comments, with a final rate decision expected by April 6. (CMS)
A CMS fact sheet clarifies why the headline figure fell flat: model and policy offsets are doing the heavy lifting. CMS reported that the projected average payment change stands at 2.54% once estimated risk-score trends related to coding practices and demographic shifts are factored in. The proposal breaks down to a 4.97% effective growth rate, a -3.32% drag from risk model revision and normalization, and a -1.53% reduction linked to diagnosis sources. (CMS)
UnitedHealth closed the regular session down roughly 1.3% at $351.64. After hours, shares dipped further, hitting a low of $315.25, according to trade data.
Insurer shares slid sharply after the announcement, with UnitedHealth, CVS Health, and Humana dropping between 10% and 15% in after-hours trading. Elevance and Molina also declined, down nearly 5%. Ryan Langston, a TD Cowen analyst, called the proposed hike “well below expectations and outside the consensus.” The Wall Street Journal noted that analysts had anticipated a 4% to 6% increase. (Reuters)
A key issue is the plan to exclude diagnoses from “unlinked” chart review records—data not attached to a specific medical visit—from risk scores beginning in 2027. Simply put, this would curb how much certain plans can inflate payments with documentation regulators argue isn’t clearly grounded in clinical encounters.
UnitedHealth faced an awkward moment with the rate announcement dropping late in the session. Investors must now balance that news with the company’s outlook on 2026 pricing, medical cost trends, and its expectations for Medicare Advantage under stricter regulations.
But it’s important to remember this is just a proposal. CMS can adjust the final figures following public feedback, and the net 0.09% average may hide significant variations between plans, counties, and benefit structures.
UnitedHealth’s full-year 2025 results and 2026 financial outlook are set for Tuesday before markets open, with a conference call at 8 a.m. ET to follow. Investors will be watching closely to see if management can calm nerves after a last-minute policy shock. (Unitedhealthgroup)
