Core Insights - Health insurance stocks, particularly UnitedHealth, Humana, and CVS Health, experienced significant declines following a proposal from the Centers for Medicare and Medicaid Services (CMS) for a mere 0.09% increase in Medicare payments for 2027, which was substantially lower than the anticipated 4% to 6% increase [1][1][1] Group 1: Medicare Payment Changes - The CMS proposed a 0.09% increase in Medicare payments for 2027, which is expected to be worth approximately $700 million to the health insurance industry [1][1] - This proposed increase follows a 5.06% rise in Medicare payments for 2026, indicating a sharp decline in expected growth for the upcoming year [1][1] Group 2: Impact on Health Insurance Stocks - UnitedHealth shares fell nearly 20% in early trading following the CMS announcement, while Humana and CVS Health saw declines of 21% and 11%, respectively [1][1] - The decline in stock prices reflects investor concerns over the financial implications of lower-than-expected Medicare payments [1][1] Group 3: Company Performance - UnitedHealth reported fourth-quarter results with adjusted earnings per share of $2.11 on revenue of $113.22 billion, aligning with estimates [1][1] - However, UnitedHealth's revenue forecast for 2026 was lower than expected at $439 billion, compared to the analyst consensus of $455.5 billion [1][1] - Over the past 12 months, UnitedHealth shares have lost nearly half their value, influenced by ongoing investigations and higher-than-expected claims activity for Medicare Advantage patients [1][1]

Core Viewpoint - Shares of major health insurance companies experienced significant declines in premarket trading following a proposal from the Trump administration to maintain flat Medicare payment rates in 2027, which did not meet Wall Street expectations [1][3]. Group 1: Stock Performance - UnitedHealth Group's shares fell nearly 9% to $317.51 [2] - CVS Health's stock price dropped 9.38% to $76 [2] - Centene's stock price decreased to $44.26, down 4.36% from the previous close [2] - Elevance Health's shares declined nearly 7% to $350.93 [2] - Humana's shares were the most affected, falling to $229, down more than 13.1% from Monday's closing [2] Group 2: Medicare Payment Rate Proposal - The Centers for Medicare & Medicaid Services proposed a 0.09% increase in Medicare Advantage payment rates for 2027, significantly lower than analysts' expectations of a 4-6% increase [3] - The previous year's increase was 5.06%, which exceeded forecasts [3] - The lower proposed increase follows President Trump's criticism of insurance companies, indicating a desire for them to earn less [3] Group 3: Official Statement - CMS Administrator Dr. Mehmet Oz stated that the proposed payment policies aim to ensure that Medicare Advantage functions better for the beneficiaries it serves [4]