Humana has turned its Medicare ratings around in a single year. The company said on Friday that 95 per cent of its Medicare Advantage members are enrolled in plans rated four stars or higher for 2027. This year the figure was 20 per cent, Reuters reported, and J.P. Morgan had expected 60 to 70 per cent.
The ratings matter because of what they pay. The Centers for Medicare and Medicaid Services rates Medicare Advantage and drug plans on a five-star scale each year, and plans with four stars or more can qualify for quality bonus payments from the government. The 2027 ratings, published on Thursday, will affect bonus payments in 2028.
Humana's shares rose more than 15 per cent to $446 in early trading, their highest level since early 2024 and the best performance in the S&P 500 on the day, Investopedia reported. They are up 75 per cent this year.
From seven contracts to eighteen
For 2027 Humana has six Medicare Advantage contracts rated 4.5 stars and 12 rated four stars, 11 more at four stars or above than a year earlier. About 42 per cent of its Medicare Advantage members are in 4.5-star plans. Its standalone prescription drug plan also earned 4.5 stars.
"We're extremely proud of these Star Ratings. They're a direct reflection of the hard work that thousands of Humana employees put in everyday, helping members get the high-quality care and coordinated support they need to achieve their best health," said Jim Rechtin, Humana's chief executive.
The company said it improved across every category of measure. It reported that 663,000 more care opportunities were met than a year earlier and 534,000 more members completed an annual preventive visit. Its outreach to members overdue for screening led to 28,000 overdue mammograms and 93,000 colorectal cancer screenings, according to the announcement.
Elizabeth Anderson, an analyst at Evercore ISI, attributed the jump to better scores on drug-plan quality, health-plan quality and readmissions, and estimated Humana could receive $4.8 billion in bonus payments in 2028 as a result, Reuters reported. Analysts at Baird said the effect on profit would depend on how much Humana reinvests in member benefits and in its arrangements with doctors and hospitals.
The reversal
The improvement ends two difficult years. A steep fall in Humana's 2025 ratings threatened its bonus payments. It sued over how those ratings were calculated and lost in October last year, and in February it forecast 2026 profit below Wall Street's estimates, according to Reuters.
Its larger rivals appear to be moving in the opposite direction. J.P. Morgan estimates that the share of UnitedHealth's Medicare Advantage members in plans rated four stars or higher will fall to about 67 per cent from 81 per cent, and CVS Health's to about 70 per cent from 84 per cent, Reuters reported.
The national picture
Across Medicare, about 71 per cent of people in Medicare Advantage plans with drug coverage are in contracts that will have four or more stars in 2027, CMS said. Using the distribution CMS published for this year, the equivalent figure for 2026 was about 67 per cent, by this publication's arithmetic. About 37 per cent of those contracts, 188 in all, earned four stars or more, and 15 earned five. The average rating, weighted by enrollment, edged down to 3.99 from 4.01.
The scoring itself changed. CMS added two new measures for 2027, on the combined use of opioids and benzodiazepines and on the use of multiple anticholinergic drugs in older adults. It tripled the weight of two measures on whether members' physical and mental health improved or held steady, and retired two others. The thresholds that decide a star on each measure are recalculated every year.
Among standalone drug plans, about 22 per cent of enrollees are in contracts rated four stars or more for 2027, up from 2 per cent in 2026, according to CMS.
The ratings now appear on Medicare Plan Finder for open enrollment, which runs from 15 October to 7 December. For Humana the stars are a selling point for the next eight weeks as well as a source of payments in 2028. Baird's caveat is the next question: how much of the bonus Humana spends on benefits and care, including the care at home that every payer now wants, an area this publication has described as the contested ground.
Humana's ratings, contract counts, preventive care figures and the quotation from Jim Rechtin are from Humana's announcement of 9 October 2026. The national figures, the methodology changes, the open enrollment dates and the link to 2028 bonus payments are from the Centers for Medicare and Medicaid Services' fact sheet on the 2027 Star Ratings, published on 8 October 2026. Humana's 2026 figure, the J.P. Morgan estimates, the Evercore ISI estimate, the Baird view and the history of Humana's 2025 ratings, lawsuit and 2026 forecast are as reported by Reuters on 9 October 2026. The share price, its ranking in the S&P 500 and its gain this year are as reported by Investopedia on 9 October 2026. The 2026 national share of enrollees in four-star contracts and the change in it are this publication's arithmetic from CMS's published distribution. The analysis is our own.
Topics businesshealth insurance
