Medicare Payment Proposal Triggers Stock Market Volatility
Written by Emily J. Thompson, Senior Investment Analyst
Source: stocktwits
- Payment Growth Expectations: The proposal indicates that Medicare plans will receive only $700 million more in 2027 compared to this year, significantly below analysts' expectations of a 4-6% increase, which poses substantial financial pressure on Medicare insurers.
- Market Reaction: Following the proposal, shares of UnitedHealth Group (UNH) fell 9%, Humana (HUM) dropped 13%, and CVS Health (CVS) declined over 9%, reflecting market anxiety regarding the future payment policies.
- Risk Score Adjustments: CMS proposed excluding unlinked diagnosis information from risk score calculations starting in 2027, which could further financially strain insurers unable to document illnesses through chart data to enhance payments, especially as payments increase when patients are sicker.
- Policy Impact: CMS stated that the new payment policies aim to ensure Medicare Advantage works better for the people it serves while protecting taxpayers from unnecessary spending, potentially affecting the long-term profitability of Medicare insurers.
Analyst Views on UNH
Wall Street analysts forecast UNH stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for UNH is 397.82 USD with a low forecast of 330.00 USD and a high forecast of 444.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
19 Analyst Rating
16 Buy
3 Hold
0 Sell
Strong Buy
Current: 356.260
Low
330.00
Averages
397.82
High
444.00
Current: 356.260
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 offers comprehensive and patient-centered care, addressing the physical, mental, social, and financial well-being. Optum Health delivers primary, specialty and surgical care; 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.
