WSJ What’s News – PM Edition

Episode: Medicare Payments Shock Sends Health Insurance Stocks Diving

Date: January 27, 2026
Host: Alex Osola
Featured Guest: Ana Wieldy Matthews (WSJ Health Insurance Reporter), UnitedHealth Executive, Richard Rubin (WSJ Tax Policy Reporter)

Episode Overview

This episode covers the dramatic market impact after the Trump administration announced Medicare payments to insurers would remain flat next year—far below Wall Street expectations. The discussion explores the resulting stock plunge for major insurers, details on what the administration is proposing, how insurers and seniors could be affected, and the industry’s strategy to push back on the government’s decision. Additional business headlines include earnings reports from GM, Boeing, UPS, and updates on Amazon’s physical retail strategy, U.S. population trends, and tax policy in an election year.

Key Discussion Points

1. Medicare Payments Proposal and Market Reaction

• Flat Reimbursement Rates:
  The Trump administration's proposal keeps Medicare Advantage reimbursement rates nearly flat for 2027, rising by only 0.09%.

  • Timestamps: [00:48], [01:40]

• Market Fallout:
  Insurer stocks, especially UnitedHealth Group and Humana, plummeted by over 14% after the news, dragging down the Dow.

  • Timestamps: [00:48], [04:17]

• Industry Expectations:
  Wall Street had anticipated a 4-6% rate increase, reflecting rising healthcare costs and insurer expectations for continued growth.

2. Administration’s Reasoning and Policy Shifts

• Methodology and Transparency:
  • Actuaries at the Medicare agency project only slight increases in health costs.
  • The administration is shifting policy to make payments more “transparent, accurate, and to sustain the program,” and to “crimp some industry billing practices.”
  • Quote (Ana Wieldy Matthews, 01:40):
    “They say that the goal here is to make Medicare payment transparent, accurate, and also to sustain the program.”

3. Insurer Concerns and Potential Impact on Seniors

• Insurer Warnings:
  An executive from UnitedHealth warned flat rates could “profoundly” impact seniors’ benefits and access.

  • Quote (UnitedHealth Executive, 02:27):
    “We will continue to work with CMS to ensure an appropriate final growth rate calculation to avoid a profoundly negative impact on seniors benefits and access to care.”

• Impact on Offerings:

  • Insurers may cut extra benefits for seniors (like dental), reduce plan choices, limit geographic coverage, or impose more restrictions (e.g., requiring referrals for specialists) to maintain margins.
  • Quote (Ana Wieldy Matthews, 02:44):
    “One thing they tend to do when they're concerned about their margins is to reduce their offerings of extra benefits that beneficiaries often like—things like dental care. ...they may offer plans that have more restrictions, like going to your primary care doctor to get a referral…”

4. The Industry’s Pushback and What’s Next

• Lobbying Blitz:
  Insurers are set for a significant lobbying and advertising campaign to sway the final payment rates before they’re finalized in early April.

  • Quote (Ana Wieldy Matthews, 03:45):
    “Absolutely, and that is definitely already underway...you’ll likely see advertising campaigns, you’ll likely see a lot of lobbying of members of Congress. The final rates tend to come out in early April.”

• Process Timeline:

  • The proposed rates are subject to change following the industry’s pressure campaign.
  • Early April is the critical point when finalized government rates are expected.

Other Headlines & Notable Business News

Stock Market Summary

• Health Insurers:
  Humana, UnitedHealth, and CVS “led market losses today, sinking 14% or more.”
• Indexes:
  • Dow fell 0.8%
  • Nasdaq gained 0.9%, uplifted by chip stocks
  • S&P 500 closed at a new high, up 0.4%
    [04:17]

Earnings Roundup

• GM:
  Despite a $3.3 billion loss (mainly from electric vehicle business), stock surged 8.8% due to strong cash flow outlook and investor-friendly moves.
• Boeing:
  Turned a profit and saw increased deliveries, but shares slipped 1.6%.
• UPS:
  Announced 30,000 job cuts while reporting stronger profits; shares up 0.2%. [04:17]

Amazon's Retail Shift

• Closing 72 Amazon Go and Amazon Fresh stores.
• Committing to expand Whole Foods and planning a new Amazon “big box” store in Illinois. [04:48]

Other Segments

Population Growth & Immigration Policy

• New census data: US population grew by 1.8 million (0.5% increase), slowest pace since COVID-19, reflecting impacts from restrictive immigration policies.
  [07:24]

Tax Refunds as Election Strategy

• Discussion with WSJ tax policy reporter Richard Rubin on how larger, more visible tax refunds are engineered this year to benefit Republicans in the midterms.
  • Quote (Richard Rubin, 08:53):
    "The real political challenge here is to keep it in the forefront for people...for the people who get much bigger refunds, they're going to be easier to see."
  • IRS staff cuts could slow down processing of complicated returns, but most electronic refunds will not be delayed. [08:53]

Legal Challenge to US Anti-Drug Operations

• Families of two Trinidad men sue US over a deadly anti-drug boat strike, alleging murder; the White House defends the strike as targeting narco-terrorists.
  [10:36]

Yale Tuition Update

• Yale to offer tuition-free attendance for families earning up to $200,000, mirroring policies by other elite universities.
  [10:36]

Memorable Quotes & Timestamps

• Ana Wieldy Matthews (on policy intent):
  “The goal here is to make Medicare payment transparent, accurate, and also to sustain the program.” [01:40]

• UnitedHealth Executive (on risk to benefits):
  “We will continue to work with CMS to ensure an appropriate final growth rate calculation to avoid a profoundly negative impact on seniors’ benefits and access to care.” [02:27]

• Ana Wieldy Matthews (on industry pushback):
  “You’ll likely see advertising campaigns, you’ll likely see a lot of lobbying of members of Congress.” [03:45]

• Richard Rubin (on tax refunds):
  “The real political challenge here is to keep it in the forefront for people...for the people who get much bigger refunds, they're going to be easier to see.” [08:53]

Episode Flow & Tone

The episode follows a brisk, news-focused format, tackling headline business news with concise, knowledgeable insights from reporters and key industry voices. The tone remains factual and analytical, with occasional pointed quotes from industry and government actors. Alex Osola’s questions keep the conversation moving and prompt clear, detailed commentary from the guests.

Key Segments & Timestamps

• [00:48] – Explanation of the Medicare payment proposals and market impact
• [01:40] – Administration policy reasoning (Ana Wieldy Matthews)
• [02:27] – UnitedHealth response and insurer concerns
• [02:44] – Potential effects on seniors and benefits (Matthews)
• [03:45] – Outlook and industry lobbying campaign
• [04:17] – Stock market and company earnings roundup
• [04:48] – Update on Amazon’s retail pivot
• [07:24] – U.S. population growth slowdown and immigration policy
• [08:53] – Tax refunds, politics, and IRS capacity (Richard Rubin)
• [10:36] – Lawsuit over US anti-drug operations and Yale tuition news

Summary for Non-Listeners

If you missed this episode, here are the essentials:
The Trump administration’s flat Medicare payment proposal shocked health insurer stocks, threatening coverage options and supplemental benefits for seniors if not reversed. The insurance industry is set for a lobbying blitz before the April decision. Meanwhile, robust earnings news, shifting Amazon retail plans, slow US population growth, and a politically charged tax refund strategy rounded out a packed news day. The episode offers fast, well-explained stories on all these fronts—with expert voiceovers from WSJ’s deep bench of reporters.