Overview
- CMS proposed a 0.09% payment update for 2027 Medicare Advantage, far below the 4% to 6% many expected, triggering a sharp reassessment across the sector.
- UnitedHealth shares fell about 19% on Jan. 27, wiping out roughly $60 billion in value, while peers also sank, including Humana down 22% and CVS nearly 14%.
- The company guided 2026 revenue to about $439 billion and projected substantial membership losses, including 1.3 million to 1.4 million in Medicare Advantage and 565,000 to 715,000 in Medicaid, for a total decline of 2.3 million to 2.8 million members.
- Executives warned the draft rates do not reflect current medical cost trends and said they will reduce benefits and reassess geographic and product footprints to prioritize margin recovery.
- Management expects at least $18 billion in 2026 operating cash flow to support the dividend and will curb buybacks until the second half of 2026, after recording a $1.6 billion after-tax charge tied to the Change Healthcare cyberattack and restructuring.