Core Viewpoint - UnitedHealth Group shares experienced a significant decline due to lower-than-expected Medicare Advantage payment increases, leading to a selloff in managed care stocks Group 1: Medicare Advantage Payment Changes - Federal regulators announced that Medicare Advantage rates would rise by only 0.09% in 2027, significantly below the anticipated increases of up to 6% [1] - This announcement triggered a broad selloff across managed care stocks, impacting investor sentiment negatively [1] Group 2: Financial Performance - UnitedHealth reported fourth-quarter adjusted earnings of $2.11 per share, slightly exceeding analyst estimates of $2.10 [2] - Despite the earnings beat, the company faced concerns due to a rising medical care ratio, which increased to 88.9% from 85.5%, indicating lower Medicare funding and higher utilization [2] Group 3: Future Earnings Guidance - The company forecasted 2026 adjusted earnings per share of more than $17.75, marginally above the analyst consensus of $17.74 [3] - The modest guidance did not alleviate concerns regarding the impact of restrained Medicare reimbursement growth on earnings [3] - UnitedHealth shares had already declined approximately 35% in 2025, reflecting investor caution regarding healthcare cost inflation and ongoing regulatory pressures in the managed care sector [3]