US Stock Market Move | Before the medical insurance sector collectively fell, Humana (HUM.US) stock price plunged more than 16%.

On Tuesday, shares of healthcare insurance companies plummeted before the market opened, with Humana (HUM.US) falling over 16%, UnitedHealth Group Incorporated (UNH.US) dropping 15%, and CVS Health Corporation (CVS.US) declining nearly 10%. On the news front, the US government proposed to maintain the payment rates for Medicare private plans at current levels next year, disappointing investors. The Centers for Medicare & Medicaid Services (CMS) announced that it expects payment rates for Medicare Advantage plans to only increase by 0.09% in 2027, much lower than analysts' expectations of up to 6% growth. Payment rates are crucial for major insurance companies like UnitedHealth Group Incorporated, CVS Health Corporation, and Humana. Higher payment rates can help insurance companies cover medical costs, enhance benefits for elderly customers, and increase profits, while a slight increase can directly squeeze profit margins. In addition, UnitedHealth Group Incorporated reported slightly better-than-expected earnings for the fourth quarter, but weak revenue guidance for 2026. According to data compiled by LSEG, UnitedHealth Group Incorporated reported adjusted earnings per share of $2.11 for the fourth quarter, higher than analysts' average expectation of $2.10. Q4 revenue was $113.2 billion, with a year-on-year increase of about 12%, but still $520 million lower than Wall Street's expectations. The company also forecasted a decline in revenue for 2026, marking the first annual revenue contraction in over three decades.