What Happened?

Shares of health insurance company Alignment Healthcare (NASDAQ: ALHC) jumped 4% in the afternoon session after comments from a Baird analyst suggested a promising outlook for earnings growth, helping the stock rebound from a sharp decline in the previous trading session. The recovery followed a significant drop after the Centers for Medicare & Medicaid Services (CMS) released a preliminary payment proposal for Medicare Advantage that fell short of expectations. The agency proposed a mere 0.09% increase in payment rates, which shocked the industry as analysts had projected growth between 4% and 6%. 

After the initial pop the shares cooled down to $21.71, up 3.6% from previous close.

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What Is The Market Telling Us

Alignment Healthcare’s shares are very volatile and have had 23 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was about 23 hours ago when the stock dropped 13.9% on the news that a preliminary payment proposal for Medicare Advantage from the Centers for Medicare & Medicaid Services (CMS) fell significantly short of expectations. The agency proposed a mere 0.09% increase in payment rates for 2027. This figure was a shock to the industry, as analysts had projected growth between 4% and 6%. The news hit the entire health insurance sector hard, and other major insurers such as UnitedHealth, Humana, and CVS Health also saw their shares tumble. The much lower-than-anticipated payment update raised concerns among investors about future profitability for companies that rely on Medicare Advantage plans.

Alignment Healthcare is up 7.4% since the beginning of the year, and at $21.71 per share, it is trading close to its 52-week high of $23.81 from January 2026. Investors who bought $1,000 worth of Alignment Healthcare’s shares at the IPO in March 2021 would now be looking at an investment worth $1,254.

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