BUZZ-'Cut points' for 2027 Medicare Advantage plans look neutral to positive, analysts say
UNH•Brokerage views vary on impact for Humana and UnitedHealth
Brokerage TD Cowen says the cut-point changes appear neutral to favorable for Humana's HUM.N largest Medicare Advantage contract, giving the insurer a somewhat clearer path to an upgrade to 4-star rating.
However, Leerink says the changes remain challenging, and views UnitedHealth UNH.N as facing the biggest hurdle.
Preliminary data indicate that about 50% of 2027 cut points increased from 2026, about 33% were unchanged and roughly 20% decreased, says Guggenheim.
The brokerage says for 2026 about 60% of cut points became harder, 25% stayed the same and 15% got easier.
Star ratings range from 1 to 5, with 5 denoting the highest performance. It influences enrollees' plan choices as well as government reimbursement levels.
CMS did not immediately respond to a Reuters request for comment.
Analysts see 2027 Medicare Advantage cut points as neutral to positive
Analysts, citing published data in a LinkedIn post, said criteria for Medicare plans to earn bonus payments look neutral to positive for U.S. health insurers.
The post refers to Centers for Medicare and Medicaid Services' cut points, which are thresholds used to determine "Star", or quality ratings, for Medicare Advantage plans.
According to Mizuho, most of the cut-point changes that made targets harder affected lower-weight measures, which carry less influence in the overall Star ratings calculation.
