Shares of CVS Health and UnitedHealth Group plunged after the Trump administration unveiled a Medicare Advantage payment proposal that raises rates by only 0.09% for 2027. The move trims an expected $700 million boost, falling far below analysts’ 4‑6% forecast and sparking a sharp sell‑off.

CMS plans to cut a lucrative billing practice that has drawn scrutiny, aiming for simpler, more accurate reimbursement. Medicare Advantage plans form the core of both insurers’ business, so the modest increase threatens profitability and could prompt a reevaluation of pricing strategies across the sector.

Investors will watch the official CMS announcement, expected Monday, for final rates that usually materialize in April after industry feedback. A 0.09% rise could trigger calls for higher reimbursement, while the elimination of the billing practice may reshape competitive dynamics among Medicare Advantage providers.

Analysts suggest that the modest increase may force insurers to seek alternative revenue streams, such as expanding ancillary services or negotiating higher premiums. The outcome will influence the broader Medicare Advantage market and could set a precedent for future federal payment adjustments.