Introduction

In January 2026, the PAI and S&P 500 both started off the year with modest gains. The PAI outperformed the S&P slightly, seeing a 1.61% month-over-month (MoM) increase compared to the S&P’s 1.37%.

The federal government entered a partial shutdown on January 31, 2026, after Congress failed to enact all remaining appropriations bills before the deadline, with negotiations stalling primarily over funding for the Department of Homeland Security (DHS). Several agencies, including the Department of Veterans Affairs (VA), had already received full-year funding and continued operating, while departments such as the Department of Health and Human Services (HHS), which oversees CMS, experienced a lapse in appropriations and were required to suspend non-essential activities.

The brief partial shutdown ended on February 3 after the House passed a funding package with full-year spending bills and a two-week extension for DHS.

In late January, CMS announced a proposed 2027 Medicare Advantage (MA) rate increase of 0.09%, or roughly $700 million. “These proposed payment policies are about making sure Medicare Advantage works better for the people it serves,” said CMS Administrator Dr. Mehmet Oz. “By strengthening payment accuracy and modernizing risk adjustment, CMS is helping ensure beneficiaries continue to have affordable plan choices and reliable benefits, while protecting taxpayers from unnecessary spending that is not oriented towards addressing real health needs.”

Following the proposal to keep MA rates relatively flat, UnitedHealth Group saw its stock price tumble by 19%, while Humana saw a 20% decrease.

“Despite heightened regulatory scrutiny and periodic gridlock in Washington, M&A activity in the home-based care sector is starting the year with extremely strong interest from both strategic and financial buyers,” said Ben Bogan, Partner and Managing Director at Stoneridge Partners. “If early-year momentum is any indication, we can expect 2026 to be a very active year for transactions across the home health, home care, and hospice space.”

Post Acute Care Index (PAI)

In January, the Pennant Group’s stock price dipped 1.88% MoM but was up 4.34% year-over-year. Pennant recently expanded with acquisitions of Twin Rivers Senior Living’s operations and real property in Idaho and Honey Creek Heights Senior Living’s real property in Wisconsin.

According to Brent Guerisoli, CEO of the Pennant Group, “These acquisitions reflect our disciplined growth strategy and our dedication to delivering exceptional care. Twin Rivers bolsters our home-state presence, while Honey Creek Heights expands our footprint in Wisconsin. The real estate transactions underscore our disciplined approach to capital deployment and value creation.” At the end of last year, Pennant also acquired 54 divested Amedisys and UnitedHealth locations in Tennessee, Alabama, and Georgia for $146.5 million.

BrightSpring’s stock price rose 4.86% in January and was up 66.40% year-over-year. In early 2025, the company announced that it would divest its community living business, ResCare Community Living, to Sevita for $835 million. That deal is anticipated to close in Q1 of this year.  “In Sevita, we are pleased to partner with a new owner with extensive experience in the I/DD industry, who is well-suited to continue to provide compassionate care to the community living client population,” said CEO Jon Rousseau. Like Pennant, BrightSpring is also acquiring a number of divested assets from UnitedHealth and Amedisys, which are expected to become accretive in 2026.

Enhabit’s stock rose 15.29% during the month and is up 26.55% year-over-year. At the 2025 Bank of America Home Care Conference last December, the company provided its growth outlook for 2026 including both acquisitive and organic projections. Enhabit aims to open 3-6 home health de novos this year, along with 9-12 de novos in its hospice segment. Additionally, Enhabit estimates a $25 – $50 million investment in strategic acquisitions during the year, aiming for acquisitive growth of 2.5 – 4.5%.

Conclusion

After a record-setting government shutdown at the end of last year and a brief partial shutdown in January, it appears that Congress is nearing completion of its spending resolutions for 2026. With a majority of the budget impasses in the federal government seemingly settled and the release of the Home Health payment rule late last year, industry leaders have the improved clarity to plan and execute their growth strategies for the new year. As Q1 2026 unfolds with buyers actively seeking new targets, the market for home-based care agencies is expected to be highly active.

Quote of the Month

“The Rural Health Transformation Program represents a generational investment in the health and vitality of rural America. By formally establishing the Office of Rural Health Transformation, CMS is reinforcing its commitment to strong leadership, accountability, and partnership as states prepare to turn this investment into lasting improvements for rural communities.”
– Dr. Mehmet Oz, CMS Administrator

Read the Full Article Here: CMS Announces Establishment of the Office of Rural Health Transformation

Stoneridge In the News:

The 2026 Healthcare M&A Forecast: Private Equity’s Next Wave of Home Health and Behavioral Health Deals Read the Full Article Here – Blog written by Partner & Managing Director Ben Bogan.

The 90-Day Sale-Prep: Your Accelerated Roadmap for Selling Your Home Health Agency in 2026 Read the Full Article Here – Blog written by Partner & Managing Director Ben Bogan.

See It To Believe It!

The Stoneridge Partners Post-Acute Care Index is updated monthly and measures the performance of these six publicly traded post-acute care companies, all listed on the NASDAQ:

• Addus (ADUS)
• Aveanna (AVAH)
• BrightSpring (BTSG)
• Brookdale Senior Living Inc. (BKD)
• Enhabit (EHAB)
• The Pennant Group, Inc. (PNTG)

Here are the results of the Post-Acute stock prices for the past two years:

Enterprise Value (EV)

Enterprise Value (EV), aka Selling Price, as Percent of Revenue

The above calculations are based on the selling price being defined as Enterprise Value (EV), with data provided by Yahoo Finance. Enterprise value is defined as market cap plus debt, minority interest, and preferred shares, minus total cash and cash equivalents. EBITDA is calculated using a methodology that may differ from that used by a company for its reporting. (Home Health Index January 2026 | Stoneridge Partners)

Recent Transactions From Around The Country

• Main Post Partners acquired HomeWell Care Services
• Choice Health at Home acquired Cy-Fair Health Care, Alliant Home Health, Palliative and Hospice Care, and Senior Nannies Private Care
• Superior Health Holdings acquired Pulse Home Health in Louisiana and Hope Healthcare assets in Louisiana Bayou County

SOLD by Stoneridge!!!

• Stoneridge Partners is proud to announce the successful sale of a Florida home health agency.

View Stoneridge closed transactions on our Website.

Home Health Index January 2026 | Stoneridge Partners

From Ben Bogan, Publisher of “Home Health Index.” Ben can be reached at [email protected] or (239) 561-0826, and toll-free at 800-218-3944. Previous editions of this monthly newsletter can be searched for at the bottom of the home page of the Home Health Index.