Catenaa, Friday, October 09, 2026- Humana stock rose by over 12% on Friday after it said Medicare Advantage members will be enrolled in plans rated four stars or higher in 2027.
Reuters reported, citing JP Morgan estimates, that Humana’s enrollments in plans rated four stars or higher will rise to 60%-70%, while rivals such as UnitedHealth will fall to about 67% from 81%, and CVS Health’s to roughly 70% from 84%.
Reuters also reported that the US Department of Health and Human Services said roughly 71% of Medicare Advantage prescription drug plan enrollees will be covered by contracts earning four stars or higher in 2027.
Higher ratings from the US health department net insurers worth billions of dollars in government bonus payments, Reuters reports.
The CMS evaluates Medicare Advantage and prescription drug plans annually using a one-to-five-star scale that weighs factors such as care quality, member experience, and customer service.
For 2027, Humana has six Medicare Advantage contracts rated 4.5 stars and 12 rated 4.0 stars, 11 more contracts rated four stars or above than in the prior year.
Additionally, 42% of Humana’s Medicare Advantage members are in plans rated 4.5 stars. Humana’s prescription drug plan contract also earned a 4.5-star rating for 2027, the company said.
Humana CEO Jim Rechtin credited the company’s workforce for the turnaround. “We’re extremely proud of these Star Ratings. They’re a direct reflection of the hard work that thousands of Humana employees put in every day, helping members get the high-quality care and coordinated support they need to achieve their best health,” Rechtin said in a statement.
Reuters reported that Humana had been under pressure since a steep drop in its 2025 ratings threatened its bonus payments.
The insurer lost a lawsuit challenging how the 2025 ratings were calculated in October last year, and forecast 2026 profit below Wall Street estimates in February.
Evercore ISI analyst Elizabeth Anderson told Reuters that the sharp rise was due to improvements in measures of drug-plan quality, health-plan quality and readmissions. The insurer could receive $4.8 billion in bonus payments in 2028 as a result.
The company said its member engagement efforts drove meaningful clinical results, including 28,000 members receiving overdue mammograms, identifying 600 previously undetected breast cancers and 93,000 members completing overdue colorectal cancer screenings, which identified 100 previously undetected cases of precancers and cancers.
Separately, Humana said last week that its 2027 Medicare Advantage coverage will reach just over 80% of US counties, down from 85% this year, as part of a broader industry pullback from less profitable markets.
The Medicare Advantage Annual Election Period begins October 15 and runs through December 7, 2026, with coverage taking effect January 1, 2027, the company said.
