Earlier this month, CMS finalized a 2.48% average rate increase for Medicare Advantage plans in 2027. Doesn't sound like much until you remember the original January proposal was 0.09%. That's a swing from near-zero to a total projected payment growth of about 4.98% when you factor in risk score trends. For UNH, the nation's largest Medicare Advantage provider, analysts estimate this adds roughly $4 billion in revenue visibility for fiscal 2027.
The stock popped 11% on the announcement alone. This was the single biggest overhang on managed care stocks all year, and CMS basically removed it. Hard to overstate how much this changes the math for the entire sector going into next year.