UnitedHealth Group shares falling on Medicare Advantage woes

UnitedHealth Group shares dropped more than 10% in pre-market trading Jan. 27 as investors worried about lagging payments to the company’s Medicare Advantage health plans.

The Eden Prairie-based company’s fourth quarter financial results were mixed.

Payment rates to Advantage plans, for which the federal government pays private insurers to cover the costs of Medicare members, will be relatively flat in 2027, the federal government said late Monday.

UnitedHealth Group officials said they will lobby the federal government in the coming weeks to revise the calculation “to avoid a profoundly negative impact on seniors’ benefits and access to care,” said Tim Noel, the chief executive at UnitedHealthcare, the company’s health insurance division.

“The CMS Advance Notice published yesterday simply doesn’t reflect the reality of medical utilization and cost trends,” Noel said during a call with investors Tuesday morning.

UnitedHealthcare is the nation’s largest provider of Medicare Advantage health plans. The business has been struggling and the lack of a rate increase in 2027 would contrast with a 5% increase this year, said Julie Utterback, an analyst with Morningstar, in a Jan. 27 research report to investors.

Fourth quarter earnings reported Tuesday were in line with expectations, but revenue was weaker than forecast by analysts. The company’s profit outlook for the year is lower than what UnitedHealth Group historically has forecast, Utterback said.

The share price at UnitedHealth Group plummeted during the first half of 2025, due in part to the Medicare Advantage woes, and the stock hasn’t recovered.

“Investors hoping for a quick turnaround may have to wait longer than hoped,” Utterback wrote in an email.

Around 7:30 a.m. central time, the company’s shares were trading at $297.10, down more than 15%.

This is a developing story. Check back for updates.

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