Overview
- CMS’s Advance Notice outlines a 0.09% average payment increase for 2027 Medicare Advantage, an industrywide boost estimated at more than $700 million and far below the 4%–6% analysts expected.
- The proposal includes risk‑adjustment updates and would exclude diagnoses from audio‑only encounters and unlinked chart‑review records starting in 2027 to tighten payment accuracy.
- Health insurer shares fell sharply, with UnitedHealth and Humana down around 20% intraday and CVS and Elevance also dropping by double digits after investors reassessed earnings prospects.
- UnitedHealth reported adjusted Q4 EPS of $2.11 (vs. $2.10 expected) on $113.2 billion in revenue (below forecasts) and guided 2026 revenue to greater than $439 billion with EPS of more than $17.75.
- CMS plans to finalize 2027 Medicare Advantage rates by April 6, and trade group AHIP warned the proposed funding level could translate into benefit cuts or higher costs for beneficiaries if adopted.