$UNH: UnitedHealth is up 7% in premarket trading. The reason:

• 2.5% vs 1% expected Medicare annual increase in ‘27: The CMS has set the 2027 annual increase in Medicare Advantage for private insurers at 2.5% vs. the 1% increase expected (and 0% previously floated).

• This negates the near term bear thesis for UNH: that the US government will squeeze insurers to keep medical costs low, even at the expense of people losing their private insurance (if companies decide to let go of business due to low reimbursement)

We think the regulatory overhang on UNH will be structural. Both parties will want to lower healthcare costs in America (for good reason), and UNH may stand to lose as an incumbent in the current system.