UNH Stock Today: January 28 Medicare Rate Shock Triggers 20% Selloff
UNH stock slumped after the CMS rate proposal signaled only a 0.09% increase for Medicare Advantage, sparking fears of margin pressure into 2026. Shares of UNH fell 19.6% to $282.70, with intraday lows of $280.40. The slide overshadowed an EPS beat and UnitedHealth 2026 guidance that was slightly above consensus. For Hong Kong investors, the focus now shifts to April when final Medicare Advantage rates arrive, as medical loss ratio and pricing power set the path for earnings and sector volatility.
Why shares fell 20% today
The CMS rate proposal of a near-flat 0.09% for Medicare Advantage implies tighter pricing and potential headwinds to margins and medical loss ratio through 2026. That headline outweighed an earnings beat and a modestly better UnitedHealth 2026 guidance. Final rates arrive in early April, so UNH stock may trade on rate sensitivity and policy risk until clarity improves.
Price closed at $282.70, down $68.94 or 19.6%, within a $280.40 to $299.50 range. Volume spiked to 65.27 million versus a 7.53 million average, signaling forced de‑risking. Market cap stands at $256.1 billion. HK investors typically settle US trades in USD, with brokers showing HKD equivalents at execution and on statements.
Guidance, margins, and what to watch next
Management issued UnitedHealth 2026 guidance slightly above consensus, but the market focused on lower potential revenue intensity and an elevated MLR path if rates stay soft. Coverage highlighted the rate shock as the key driver despite upbeat profit outlooks source and noted revenue softness risks source.
Final Medicare Advantage rates are due in early April. Until then, managed-care peers may see elevated beta. Watch commentary on product repricing, benefit design changes, and MLR cadence on follow-up calls. The earnings announcement posted on 27 Jan 2026 UTC sets the baseline. UNH stock direction likely hinges on the rate update and any cost trend disclosures.
Valuation and technicals after the selloff
After the drop, UNH trades near 14.7x EPS and about 0.57x sales. Dividend yield is roughly 3.08% on a $8.73 TTM payout. Free cash flow yield stands near 12.5%, with price-to-free-cash-flow around 8.0x. Balance sheet metrics show debt-to-equity near 0.78 and interest coverage of 4.74x. These support cash returns if margins hold.
Despite the plunge, RSI sits near 57.6 and ADX near 17 suggests no strong trend. Price is below the lower Bollinger Band at 320.52 and under the Keltner lower channel at 319.49, signaling stretched downside. ATR at 8.33 points to wider daily swings. For UNH stock, stabilization needs basing above prior lows.
Playbook for Hong Kong investors
Use smaller entries and staged buys while the rate path is uncertain. Most HK brokers let you trade US shares in USD, with optional HKD conversion. Consider your USD exposure and portfolio limits. Medicare policy has little direct impact on HK insurers, yet global fund flows can still move Asia allocations near US macro events.
Base case is a modest improvement from the preliminary CMS rate proposal in April. Bull case is a better-than-feared uplift and tighter cost trend. Bear case is flat-to-down rates with higher MLR. Track benefit design changes, Optum growth, working capital, and a current ratio near 0.79. Set clear stop rules for UNH stock.
Final Thoughts
Here is our take. The CMS rate proposal at 0.09% is the core pressure point, not the operations alone. UNH stock now embeds policy risk into April. Valuation looks more reasonable at about 14.7x earnings with a 3% cash yield, backed by solid free cash flow. That said, the medical loss ratio and benefit redesign will drive the next leg. For Hong Kong investors, size positions conservatively, assume higher volatility, and keep USD exposure in check. Key catalysts are management updates and the final Medicare Advantage rates in early April. If rates improve even modestly, sentiment could stabilize quickly.
FAQs
Why did UNH stock drop about 20% today?
The market reacted to the CMS rate proposal showing only a 0.09% Medicare Advantage increase. That suggests tighter pricing power and possible margin pressure into 2026, which outweighed an earnings beat and slightly better guidance. Heavy volume signaled de‑risking across managed-care names while investors wait for final rates in early April.
What does the CMS rate proposal mean for margins and MLR?
A near-flat Medicare Advantage rate limits revenue per member growth. If care costs trend higher, the medical loss ratio can rise, compressing margins. Plans may respond with benefit redesign, network tweaks, or pricing changes. Final rates in early April will set the revenue baseline that determines 2026 margin potential.
Is UNH stock attractive after the selloff?
Valuation reset to roughly 14.7x EPS with a 3% dividend yield and strong free cash flow. Analysts skew positive, with 32 Buy, 5 Hold, and 2 Sell ratings. Our system shows a B+ grade with a BUY suggestion, while a separate company rating is Neutral. The April rate decision remains the key risk.
What dates should Hong Kong investors watch for UNH stock?
Focus on the CMS final Medicare Advantage rates in early April, plus any management updates on benefit design and MLR. Also monitor sector peer commentary for read-through. US headlines can move prices during Asia hours, so set alerts and review broker notifications for premarket changes.
How should HK investors handle USD exposure when trading UNH stock?
Most HK brokers settle US trades in USD and display an HKD equivalent. Consider your USD allocation, potential hedging through your broker, and fees for FX conversion. Keep position sizes modest until the rate outcome is known. Review account settings to manage currency risk and cash balances efficiently.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
