Medicare Rate Surprise Increase... Insurance Stocks Gain 6 Trillion Won in One Day

When the U.S. Department of Health and Human Services’ Centers for Medicare & Medicaid Services (CMS) announced its final rule raising Medicare Advantage payment rates by an average of 2.48% for 2027, shares of health insurers with large Medicare businesses surged. ()

Humana Inc. (NYSE: HUM) closed at $205.51 on the New York Stock Exchange, up 15.6%, with trading volume exceeding 1.07 million shares.

Humana’s market capitalization jumped by about $4.5 billion (approximately ₩6 trillion) in a single day to roughly $24.6 billion (around ₩33 trillion).

The company reported adjusted earnings per share (EPS) of $17.14 for 2025 and projects at least $9 of adjusted EPS in 2026 alongside 25% growth in Medicare Advantage enrollment, while restructuring its portfolio by exiting operations in 194 low-profit counties. ()

Buoyed by this Medicare Advantage contract diversification strategy, brokerages such as Jefferies have raised their earnings forecasts for 2026 and 2027 and upgraded their ratings on Humana. ()

Headquartered in Louisville, Kentucky, Humana is a major health insurer that derives most of its revenue from government-funded plans—including Medicare Advantage and Medicaid—and from its CenterWell healthcare services brand. Since 2023, it has effectively withdrawn from the employer-sponsored commercial insurance market. ()

Given its high dependence on government programs, Humana is classified as highly policy-sensitive, with CMS rate decisions and changes to the star-rating system directly impacting its financial performance and valuation. ()