UNH vs. HUM: Which Insurance Stock Offers Greater Potential Following CMS's Reversal of Wall Street's Major Medicare Rate Concern?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Apr 07 2026
0mins
Source: stocktwits
Medicare Advantage Funding Increase: A revised policy is set to add over $13 billion in funding to Medicare Advantage plans, following a previous proposal that significantly impacted insurers' market value.
Stock Performance: Shares of UnitedHealth (UNH) rose by 8% and Humana (HUM) gained 11% after the announcement, although both stocks have seen declines of approximately 45% and 27% respectively over the past year.
Payment Rate Adjustments: The Centers for Medicare & Medicaid Services (CMS) finalized a 2.48% increase in Medicare Advantage payment rates for 2027, reversing earlier proposals that kept rates flat.
Market Sentiment: Retail sentiment for UNH and HUM remains bullish, with analysts providing a range of ratings, indicating a strong outlook for UnitedHealth's expanding AI strategy and potential revenue relief amidst rising medical costs.
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Analyst Views on UNH
Wall Street analysts forecast UNH stock price to rise
19 Analyst Rating
16 Buy
3 Hold
0 Sell
Strong Buy
Current: 376.860
Low
330.00
Averages
397.82
High
444.00
Current: 376.860
Low
330.00
Averages
397.82
High
444.00
About UNH
UnitedHealth Group Incorporated is a healthcare and well-being company. Its segments include Optum Health, Optum Insight, Optum Rx, and UnitedHealthcare, which includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement and UnitedHealthcare Community & State. Optum Health provides comprehensive and patient-centered care, addressing the physical, mental, and social well-being. Optum Health delivers primary, specialty and surgical care and helps patients and providers navigate and address complex, chronic and behavioral health needs. Optum Insight connects the healthcare system with services, analytics and platforms that make clinical, administrative and financial processes simpler and more efficient for all participants in the healthcare system. Optum Rx offers a range of pharmacy care services through retail pharmacies, through home delivery, specialty and community health pharmacies and the provision of in-home and community-based infusion services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Exit from Notable Investments: In Q1 2026, Berkshire exited positions in well-known companies such as Amazon, Domino's Pizza, Mastercard, and Visa, reflecting Abel's search for new investment opportunities and possibly a response to market dynamics.
- New Investment Directions: Proceeds from these stock sales have been redirected into emerging investments like Delta Airlines and Macy's, while also significantly increasing stakes in Alphabet, showcasing confidence in future growth potential.
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See More
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- Portfolio Adjustment: Berkshire Hathaway completely sold its 5 million shares of UnitedHealth Group in Q1 2026, indicating uncertainty about the healthcare stock's future performance, despite its over 40% rise since April.
- Core Investments Intact: While exiting UnitedHealth, Abel has not made significant changes to Berkshire's core investments, maintaining stakes in traditional quality assets like American Express and Coca-Cola, reflecting a commitment to long-term value.
- New Investment Directions: Proceeds from the sales likely flowed into new positions in Delta Airlines and Macy's, while also significantly increasing investments in Alphabet, indicating a focus on technology and consumer sectors.
- Future Growth Risks: UnitedHealth's management acknowledges that the company's turnaround is ongoing, and if future earnings growth fails to meet the 12.3% expectation, the stock could drop below $300 per share, reflecting market caution regarding its future performance.
See More
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- Billionaire Sell-Off: Billionaires Chase Coleman and David Tepper reduced their stakes in UnitedHealth Group by 17% and 55% respectively in Q1 2026 according to 13F filings, despite analysts maintaining a bullish outlook, indicating a disconnect between market sentiment and investor actions.
- Rising Medical Costs: UnitedHealth faces challenges with rising medical costs that are squeezing profit margins, alongside increased uncertainty regarding Medicare Advantage rates, which may have influenced the billionaires' decision to sell, reflecting concerns about the company's future profitability.
- Analyst Optimism: Despite the sell-off, 22 out of 28 analysts surveyed by S&P Global rated UnitedHealth Group as a
See More
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- Billionaire Sell-Off: Billionaires Chase Coleman and David Tepper reduced their stakes in UnitedHealth Group by approximately 17% and 55% respectively in Q1 2026, indicating a cautious stance despite analysts' overall bullish outlook on the stock.
- Cost Pressure Challenges: UnitedHealth faces rising medical costs that are squeezing profit margins, coupled with increased uncertainty regarding Medicare Advantage rates, which could impact future profitability.
- Analyst Optimism: Despite the sell-off, 22 out of 28 analysts still rated UnitedHealth Group as a 'buy' or 'strong buy', reflecting confidence in the company's improving business fundamentals and stock rebound.
- Strong Financial Performance: UnitedHealth's Q1 2026 earnings report exceeded analyst expectations, with a 90 basis point decline in the medical cost ratio to 83.9%, indicating positive progress in managing medical costs.
See More
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- Small Position Cleanup: In Q1, Abel eliminated 16 small positions, including Visa and Amazon, none of which accounted for more than 1% of Berkshire's total portfolio, aiming to enhance focus and efficiency in the investment strategy to improve long-term performance.
- Decisive Exit from Losers: Berkshire sold off underperforming stocks like Pool Corp. and Domino's Pizza in Q1, which may have locked in losses, but Abel believes that timely exits are necessary to prevent dragging down overall investment performance amid uncertainty.
- Investment in Special Situations: Abel initiated new stakes in Delta Air Lines and Macy's during Q1, both facing systemic challenges, indicating a strategic willingness to invest in potentially undervalued companies that could yield returns in the future despite current difficulties.
- Increased Cash Reserves: As of the end of March, Berkshire's cash reserves reached $397 billion, suggesting that Abel may be waiting for more attractive investment opportunities while potentially shifting towards wholly-owned cash-generating businesses to reduce reliance on volatile stocks.
See More
