Humana surges after emerging as top beneficiary of 2027 Medicare star ratings
HUM•Humana shares rose 15% in premarket trading after 95% of its Medicare Advantage members were set to be enrolled in plans rated four stars or higher in 2027, up from 20% in 2026. Analysts had expected 60% to 70%.
1. Ratings improve sharply
Humana said 95% of its Medicare Advantage members will be enrolled in plans rated four stars or higher in 2027, up from 20% in 2026, as measures of care quality and member experience improved. J.P. Morgan analysts had expected 60% to 70%.
2. Government bonuses
The U.S. health department rates Medicare Advantage and prescription drug plans on a one-to-five-star scale. Higher ratings lead to government bonus payments amounting to billions of dollars and boost plan enrollment.
3. Rivals and overall plans
J.P. Morgan estimates UnitedHealth's share of plans rated four stars or higher will fall to about 67% from 81%, and CVS Health's to roughly 70% from 84%. The health department said about 71% of Medicare Advantage prescription drug plan enrollees are in contracts that will be rated four stars or higher in 2027. Evercore ISI analyst Elizabeth Anderson said Humana improved in drug-plan quality, health-plan quality and readmissions, reflecting management's focus on fixing the metric over the past year.
