Health insurance stocks take a dive
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OK, so who in the administration shorted these stocks?
The health insurance sector saw a deep sell-off Tuesday morning, led by a plunge in UnitedHealth Group (UNH) shares, as the Trump administration proposed a lower-than-expected increase to 2027 Medicare Advantage plans.
In a report published Monday night by the Centers for Medicare & Medicaid Services (CMS), the administration proposed that payment rates for Medicare Advantage plans (private insurance plans) will rise by just 0.09% in 2027. Analysts were expecting an increase of as much as 6%.
UnitedHealth (UNH) lost more than 19%, while fellow major insurers Elevance Health (ELV) and CVS (CVS) each shed more than 12.
UnitedHealth has the largest exposure among insurers to Medicare Advantage changes, accounting for roughly 30% of enrollment nationally. Humana (HUM), which comes in second with roughly 17% of national enrollment, also saw shares plunge near 20% on Tuesday.
The tiny increase for 2027 comes after the insurance got a 5.06% increase for 2026, higher than expected. Final numbers for 2027 are scheduled to be finalized on or before April 6, according to William Blair analysts.
