US health insurer stocks call in sick

0:01Good morning from the Financial Times. Today is Wednesday, January 28th, and this is your FT News briefing. U.S. health insurance stocks are feeling under the weather, and there's a new trade deal on the block. Plus, Nordic countries are hoping the Greenland debacle will make NATO focus on Arctic security. I'm Sonia Hudson, and here's the news you need to start your day.

0:36Shares of American health insurance groups plunged yesterday. The Trump administration proposed no increase to Medicare payments to those companies next year. Medicare is a federal health insurance program for Americans 65 and older. Shares of UnitedHealth and Humana dropped around 20 percent. Patrick Temple West covers health care for the FT. He is here to make sense of these moves for us. Hi, Patrick. Hello, Sonia. Can you just put this in context for us? What is the administration's proposal? Late Monday, CMS, the Centers for Medicare and Medicaid Services, put out this announcement about its proposed rate change for 2027.

1:20The government does it every year. What was really surprising is CMS said no increase, less than a tenth of a percent increase, which is basically flat for 2027. Health insurance companies take government money and then provide the health care services for millions and millions of Americans. So when the government says that it's not going to increase the rate below inflation and below Wall Street investors and the companies were expecting, that really spooked the market. And just how crucial are these Medicare payments for the insurance companies? These add up to billions of dollars for the companies.

2:00There are several different categories of Medicare coverage plans for senior citizens. Medicare Advantage is the one where they partner with insurance companies to provide coverage and care for people. Insurers were paid nearly$540 billion by the U.S. government in 2025. So this is an enormous amount of money that the companies receive for their services. Okay, so this proposal means that these companies would not get the increase that they were expecting. Did the Trump administration say why they want to do this? Not really. There was a press release Monday night, but it wasn't very specific as to the reasoning here.

2:46There will be an opportunity for the companies to ask for comment from the administration to get a better understanding of why. Was this a political thing? Obviously, there are midterm elections coming up in November. Do they see an opportunity to put this in a category of keeping costs low for Americans? It's unclear. And it's still too early to say for sure. Let's zoom in on UnitedHealth in particular. It came out with an earnings report yesterday that showed this threat is not its only problem. Correct. So in addition to the bad news that the company got Monday night from the Trump administration, it said on Tuesday that its earnings for 2025 were down compared to the year before.

3:36and it forecast a drop in revenues for 2026, the first drop going back to at least the mid-90s. UnitedHealth has had a really difficult past 12 months or so. About April last year, the company had a bad earnings report that sent shares down. And then in May, it replaced its CEO, which really spooked the market and has sent shares tumbling by a third. It experienced a cybersecurity hack back in 2024. There was the horrible murder of its executive in December 2024. So the company has been enduring a lot and hasn't really been able to spring back as quickly as I'm sure the investors would like. What are you going to be watching for with these insurance companies between now and April when the Medicare rates are finalized?

4:29Is this a taco trait? We know that well around here, Trump always chickens out. This was a proposal from the Trump administration Monday night. So there's a lot of room to negotiate. There's a lot of room to lobby. There's a lot of room to at least claw back some increase. So while the share prices are down and because it was so shocking, let's see what happens when this has to be finalized in April. Patrick Temple West covers health care for the FT. Thanks, Patrick. You're welcome.

5:08The European Union and India signed a new trade deal yesterday. It'll eliminate up to 4 billion euros of tariffs on EU exports, and it could double shipments to India. European Commission President Ursula von der Leyen hailed it as, quote, the mother of all trade deals. The agreement reduces costs on cars, food, alcohol, and machinery. But sensitive agriculture sectors, including dairy, sugar, and some meats, were untouched. The deal comes as both Brussels and New Delhi face a barrage of tariffs from the United States. But the agreement still needs approval from the European Parliament, EU member states, and India's cabinet.

5:59President Donald Trump's focus on Greenland has put Arctic security in the limelight, which is music to Nordic countries' ears. They've been sounding the alarm bell over Russia's military presence there. I'm joined by the FT's Richard Milne in Oslo to discuss this. Hey, Richard. Yeah, hey there. So why are Nordic countries saying it's so important to protect the Arctic? Well, it has a lot to do with Russia and how they've been building up their military capabilities, most obviously for the full-scale invasion of Ukraine. But there's a lot of capabilities and, frankly, a revitalization of what they're doing in the Arctic.

6:41It currently has more than 40 military facilities in the Arctic. And one of the main places where it has this is the Kola Peninsula, which is around Murmansk. So it's right on the border with Norway. And there it has the northern fleet, and it also has half of its nuclear armed submarines. So what the Nordics say is that if, you know, there's a nuclear missile aimed at the US, it takes about 18 minutes to get there from the Kola Peninsula, flies over the North Pole. And so therefore having a presence in the Arctic to be able to detect and monitor missiles, submarines, ships is crucial. What are NATO powers doing to build up their defensive capabilities in the Arctic region right now?

7:32So, I mean, it sort of varies country by country. You've got somebody like Norway and Finland, for which the Arctic has always been a huge focus. Then you have others like Denmark, which, you know, Trump was maybe not wrong here. They did deprioritize the Arctic and Greenland. And now they're investing billions and billions in ships, in drones, in aircraft. And then you have the U.S. itself, which, you know, for all the bluster out of the White House, has really scaled back its Arctic presence. It used to have up to 17 bases on Greenland. It only has one now. So, you know, I think what Trump did in Greenland was also kind of in some ways a reaction to how little the U.S.

8:20has done in the Arctic in recent decades. Yeah. How does this buildup of NATO military capabilities in the Arctic fit in with Donald Trump's plans for Greenland? Well, I think from the Nordic side, hopefully it doesn't at all. This is where they wanted that conversation. So you've seen Denmark and Greenland jointly call for a permanent mission in Greenland. And I think you already see the US has a space base in Greenland that has about 150 soldiers that's plugged into its early warning missile system. And this could be a crucial place for the Golden Dome, which is this quite advanced and challenging missile defense system that Trump wants to have that would protect the US and maybe others from kind of any kind of missile.

9:12And so Greenland could play a key role in that. Is there any pushback to increasing militarization of this, you know, relatively peaceful region? There is, I think, because this region up until very recently was always categorized as low tension high north. It's home to four or five million people, a lot of them indigenous, and obviously some very fragile ecosystems. And, you know, I think there was a hope that maybe it could be insulated from geopolitics. Now, Russia's invasion of Ukraine showed that it couldn't. But I think there's still a hope that it doesn't get militarily as hot as most of the other parts of the world.

10:03Richard Milne is the FT's Nordic and Baltic correspondent. Thanks, Richard. Thank you.

10:14Before we go, it's getting harder for recent college graduates to land their first jobs. Economic uncertainty and the arrival of AI have led to a reduction in entry-level roles. If this is something you're experiencing, we wanna hear from you. Send us a voice memo with your name, where you're from, and how you're navigating this job market. And we may even play it on an upcoming episode. You can find more information in the show notes. This has been your daily FT News Briefing. Check back tomorrow for the latest business news. Thank you.