Baird analysts said CMS' headline was "in line with, if not slightly favorable to, the assumptions contemplated in OSCR's guidance," making today's stock drop "overly punitive."
OSCR had already flagged about 1 million potentially unauthorized members, so the roughly 760,000 affected members announced by CMS is lower than initially feared and is seen as a modest positive, Baird said.
CMS said unauthorized enrollments could lead to up to $6.6 billion in improper federal spending in 2026, while the administration said its fraud crackdown could save about $2.2 billion in taxpayer money.
As of the last close, the stock was more than double year to date.
Shares of health insurer Oscar Health fell 1.8% to $30.74 after the Trump administration halted Obamacare enrollment for more than 760,000 people it believes are fraudulently enrolled.
Last month, the U.S. Centers for Medicare & Medicaid Services canceled about 315,000 health plans and said it would review another 419,000 to 450,000 enrollments to verify eligibility.
