What Happened?

Shares of diversified healthcare company CVS Health (NYSE: CVS) fell 13.9% in the afternoon session after the Centers for Medicare and Medicaid Services (CMS) proposed a significantly lower-than-expected payment rate increase for Medicare Advantage plans in 2027. 

The U.S. government agency released an initial notice that included a nearly flat 0.09% rate increase for the coming year. This proposal fell dramatically short of the 4% to 6% increases that analysts and investors had anticipated, a move that blindsided the market. The lower payments raised concerns about future revenue for health insurers. The news affected the entire sector, with shares of rivals like Humana and UnitedHealth Group also falling sharply in response to the unexpected announcement.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy CVS Health? Access our full analysis report here, it’s free.

What Is The Market Telling Us

CVS Health’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for CVS Health and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 12 months ago when the stock gained 16.4% on the news that the company reported fourth-quarter results that exceeded expectations, with same-store sales significantly surpassing analysts' forecasts and EPS outperforming Wall Street's estimates by a wide margin. 

Growth was powered by strong performance in the Pharmacy & Consumer Wellness segment​. On the other hand, its full-year EPS guidance missed. Despite this, we think this was a decent quarter.

CVS Health is down 10.2% since the beginning of the year, and at $71.95 per share, it is trading 14.2% below its 52-week high of $83.87 from January 2026. Investors who bought $1,000 worth of CVS Health’s shares 5 years ago would now be looking at an investment worth $993.52.

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