Shares of major health insurers such as Humana (HUM) and UnitedHealth (UNH) surged 12.2% and 9.6%, respectively, in after-hours trading on Monday. The upside came after the Centers for Medicare & Medicaid Services (CMS) finalized its 2027 Medicare Advantage (MA) payment update, giving the sector a solid boost following months of pressure.
Claim 55% Off TipRanks
- Unlock hedge fund-level data and powerful investing tools for smarter, sharper decisions
- Discover top-performing stock ideas and upgrade to a portfolio of market leaders with Smart Investor Picks
CMS confirmed that the U.S. Medicare program will pay private insurers 2.48% more in 2027, a meaningful improvement over the near‑flat increase proposed in January. The higher-than-expected update eases concerns about rising medical costs next year and supports better profitability across MA plans. CMS also noted the change amounts to roughly $13 billion in additional payments to insurers.
Shares of CVS Health (CVS), parent of Aetna, also climbed 5% as the final rate helped ease worries about margin pressure heading into 2027.
The CMS decision had been one of the most closely watched catalysts of the year for health insurers, which have faced concerns about MA profitability, higher utilization, and regulatory scrutiny. Monday’s rally reflects renewed confidence that 2027 may offer a more stable operating backdrop after a turbulent stretch for the industry.
Which Stock Is a Better Buy?
We used TipRanks’ Comparison Tool to see which of the above-mentioned stocks analysts favor. According to analysts, CVS stock has the highest upside potential of 31.45%.
