- Humana shares surged 15% after the insurer reported that 95% of its Medicare Advantage members will be enrolled in plans rated four stars or higher in 2027, compared with 20% in 2026.
- The improved ratings could generate $4.8 bn in government bonus payments in 2028, although the earnings benefit will depend on reinvestment decisions.
- Humana’s improvement contrasts with projected declines in high-rated plan enrollment at UnitedHealth and CVS Health, according to J.P. Morgan estimates.
Humana shares rose 15% on Friday after the health insurer reported a substantial improvement in its 2027 Medicare Advantage star ratings, prompting analysts to identify the company as the biggest beneficiary of the latest government quality assessments.
Humana said 95% of its Medicare Advantage members will be enrolled in plans rated four stars or higher in 2027, compared with just 20% in 2026. The improvement exceeded J.P. Morgan’s expectations, which had projected that 60% to 70% of members would qualify for highly rated plans.
Medicare Advantage star ratings carry significant financial implications for US health insurers, as higher scores can generate billions of dollars in government bonus payments. Humana’s improved performance could translate into a substantial increase in those payments beginning in 2028, Reuters noted.
Evercore ISI attributed the improvement to stronger results across drug-plan quality, health-plan quality and hospital readmission measures. The higher ratings could generate approximately $4.8 bn in bonus payments for Humana in 2028.
The eventual earnings contribution remains uncertain. Analysts at Baird said the impact on profitability would depend partly on how much of the additional funding Humana reinvests in member benefits and arrangements with healthcare providers.
Humana’s ratings also compare favorably with those of its larger competitors. J.P. Morgan estimates that UnitedHealth’s proportion of enrollments in Medicare Advantage plans rated four stars or higher will decline to approximately 67% in 2027 from 81% in 2026.
CVS Health is expected to experience a similar reduction, with its share of enrollments in highly rated plans falling to around 70% from 84%, according to the bank’s estimates.
The improvement represents a recovery for Humana following two difficult rating cycles. A sharp decline in its 2025 Medicare Advantage ratings had threatened the company’s government bonus payments and placed pressure on its financial outlook.
In October 2025, Humana lost a lawsuit challenging the methodology used to calculate its 2025 star ratings. The insurer subsequently forecast 2026 profit below Wall Street expectations in February, adding to concerns over its earnings performance.
Humana is among the largest providers of Medicare Advantage coverage in the United States, serving people aged 65 and older and individuals with disabilities.
Across the broader market, approximately 71% of Medicare Advantage prescription drug plan enrollees will be in contracts rated four stars or higher in 2027, according to figures released by the US health department.
Humana’s projected 95% enrollment in highly rated plans puts the insurer well above that industry-wide figure, although the measures cover different enrollment groups. The financial benefit from its ratings recovery will become clearer as the company determines how to allocate the additional government payments between member benefits, healthcare provider arrangements and earnings.
