Humana surges after topping 2027 Medicare star ratings
HUM•Humana shares rose 15% after analysts named it the top beneficiary of 2027 Medicare Advantage star ratings. The company said 95% of its members will be enrolled in plans rated four stars or higher, up from 20% in 2026.
1. Ratings rebound
Humana said 95% of its Medicare Advantage members will be enrolled in plans rated four stars or higher in 2027, compared with 20% in 2026. That exceeded J.P. Morgan’s expectation of 60% to 70%. Higher ratings can qualify insurers for government bonus payments.
2. Estimated bonus payments
Evercore ISI analyst Elizabeth Anderson attributed the improvement to measures of drug-plan quality, health-plan quality and readmissions. She said Humana could receive $4.8 billion in bonus payments in 2028. Baird analysts said the profit boost will depend on reinvestment in member benefits and arrangements with healthcare providers.
3. Rivals and industry
J.P. Morgan estimated that UnitedHealth’s share of enrollments in plans rated four stars or higher will fall to about 67% from 81%, while CVS Health’s will decline to roughly 70% from 84%. Overall, about 71% of Medicare Advantage prescription drug plan enrollees are in contracts rated four stars or higher in 2027, the health department said.
