Overview
- CMS, which finalized the 2027 Medicare Advantage and Part D payment rule Tuesday, set a 2.48% average increase for plan rates.
- Officials said tweaks to risk adjustment, the formula that scores patient health, add about 2.5% and lift total new funding above $13 billion, shaping 2027 premiums and benefits.
- Regulators delayed some planned risk‑model changes after warnings that a fast rollout was prompting insurers to drop fixed‑payment contracts with providers and leading to network exits.
- Elevance shares rose intraday after the rule, with Bank of America raising its price target to $405 with a Neutral view and Evercore ISI reinstating at Inline with a $345 target.
- Elevance still faces a 2026 earnings trough, with management guiding to at least $25.50 in adjusted EPS and projecting Medicaid operating margins near negative 1.75%, which keeps near‑term results under pressure.