--- title: "Trump Just Shocked Medicare Stocks — Will Seth Klarman Seize This Moment?" type: "News" locale: "en" url: "https://longbridge.com/en/news/273872989.md" description: "Trump's proposed 0.09% rate hike for Medicare Advantage plans in 2027 led to a selloff in healthcare stocks, with major companies like CVS, Humana, Elevance, and UnitedHealth seeing significant declines. Billionaire Seth Klarman views this as a buying opportunity, increasing his stake in insurance-related stocks. Klarman believes the market is overreacting to policy changes and sees long-term value in managed care despite regulatory risks. His strategy focuses on durable businesses that can withstand market fluctuations, positioning him to capitalize on current market fears." datetime: "2026-01-27T16:55:31.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/273872989.md) - [en](https://longbridge.com/en/news/273872989.md) - [zh-HK](https://longbridge.com/zh-HK/news/273872989.md) generator: "portal-rs" --- # Trump Just Shocked Medicare Stocks — Will Seth Klarman Seize This Moment? The Medicare Advantage trade just got repriced—by Washington. **Donald Trump**‘s administration proposed 0.09% rate hike for Medicare Advantage plans in 2027, a fraction of Wall Street's 4%–6% expectations, triggering a sharp selloff across the sector. Stocks of managed-care giants like **CVS Health Corp** (NYSE:CVS), **Humana Inc** (NYSE:HUM), **Elevance Health Inc** (NYSE:ELV), and **UnitedHealth Group Inc** (NYSE:UNH) plunged on Monday, and remained in the red during pre-market on Tuesday. It was a blunt reminder that healthcare insurers don't just trade on earnings—they trade on policy. And with managed care stocks stuck in this policy-driven carnage, billionaire hedge fund manager **Seth Klarman** may be quietly looking to seize the moment. ## **Klarman's Contrarian Healthcare Bet** **Baupost** **Group**'s latest filings show insurance-related stocks now make up over 16% of its disclosed U.S. equity portfolio, with Elevance Health approaching a 9% position after a 114% increase in shares. That's not a passive allocation. That's a statement. Klarman's playbook is familiar: buy durable, cash-generating businesses when the market prices them like melting ice cubes. Rising medical utilization and regulatory uncertainty crushed managed-care multiples in 2024–2025. Klarman appears to see the sector as structurally essential—and temporarily mispriced. He's also kept **Willis Towers Watson PLC** (NASDAQ:WTW) as a top holding, trimming modestly but maintaining conviction in the brokerage model. Brokers are classic Klarman "toll booth" assets: they monetize insurance volume regardless of whether premiums rise or fall. ## **Policy Risk vs Margin of Safety** The Medicare Advantage shock underscores the fragility of insurer margins to political decisions. More than half of Medicare beneficiaries are now in private plans, making MA a quasi-government asset class for investors. A single rate tweak can erase billions in equity value overnight. Klarman's bet is that the market is overreacting—that scale players like Elevance retain long-term pricing power, cost control levers, and demographic tailwinds that Washington can't legislate away. The question is whether this is deep value or a structural value trap. Trump just reminded investors that healthcare insurers operate at the mercy of policy. Klarman is betting that fear is exactly what creates the margin of safety. *Photo: Shutterstock* ### Related Stocks - [VHT.US](https://longbridge.com/en/quote/VHT.US.md) - [HUM.US](https://longbridge.com/en/quote/HUM.US.md) - [UNH.US](https://longbridge.com/en/quote/UNH.US.md) - [XHS.US](https://longbridge.com/en/quote/XHS.US.md) - [XLV.US](https://longbridge.com/en/quote/XLV.US.md) - [CVS.US](https://longbridge.com/en/quote/CVS.US.md) - [ELV.US](https://longbridge.com/en/quote/ELV.US.md) - [IHF.US](https://longbridge.com/en/quote/IHF.US.md) - [UNHG.US](https://longbridge.com/en/quote/UNHG.US.md) ## Related News & Research - [BUZZ-Elevance rises after positive Q3 comments](https://longbridge.com/en/news/298612982.md) - [BUZZ-'Cut points' for 2027 Medicare Advantage plans look neutral to positive, analysts say](https://longbridge.com/en/news/298494594.md) - [15:11 ETDid Humana Inc. Insiders Breach their Fiduciary Duties to Shareholders?](https://longbridge.com/en/news/298230971.md) - [3,146 Shares in Humana Inc. $HUM Bought by Retireful LLC](https://longbridge.com/en/news/297898101.md) - [11:00 ETThyme Care Closes $125+ Million Series E, Establishes Thyme Companies to Broaden Its Impact Across the Oncology Ecosystem](https://longbridge.com/en/news/297804529.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**