MW Why shares of UnitedHealth, Humana and others are tanking and taking the Dow with it

By Steve Goldstein

Medicare Advantage rate proposal calls for very slight increase in 2027 payments

Dr. Mehmet Oz, administrator of the Centers for Medicare and Medicaid Services, issued a rate proposal that surprised analysts.

The shares of UnitedHealth, Humana and other health insurers were clobbered on Tuesday after a preliminary payment proposal for Medicare Advantage fell way short of analyst expectations.

The Centers for Medicare & Medicaid Services, in a statement late Monday, proposed a 0.09% increase for 2027 rates, versus the expectations of growth between 4% and 5%.

Preliminary Medicare Advantage rates often get revised higher.

The news shocked health insurers, with shares of UnitedHealth $(UNH)$ falling 9%, Humana $(HUM)$ losing 12%, CVS Health $(CVS)$ losing 9%, Alignment Healthcare (ALHC) dropping 12% and Elevance Health (ELV) retreating 5%.

The iShares U.S. Healthcare Providers ETF IHF fell 4%.

Because of the way the Dow Jones Industrial Average DJIA is calculated, the decline for UnitedHealth weighs down the blue-chip index by 186 points. Dow futures (YM00) were pointing to a 0.1% retreat on a day the S&P 500 contract (ES00) rose 0.2%.

Analysts point out the preliminary rates often get revised higher - according to JPMorgan's Lisa Gill, that happened in eight of the last 10 years.

If the reimbursement rate isn't moved higher, she said managed care providers will trim benefits and focus on margin improvement over membership.

-Steve Goldstein

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January 27, 2026 04:06 ET (09:06 GMT)

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