Humana’s stock surged 15% in pre‑market trading on Friday after the insurer disclosed that it will be the biggest beneficiary of the new 2027 Medicare Advantage star‑rating system.
Star‑rating gains signal stronger quality and enrollment
The company said 95% of its Medicare Advantage members will be enrolled in plans rated four stars or higher in 2027, a dramatic increase from just 20% in 2026. Analysts at J.P. Morgan had expected the figure to fall between 60% and 70%.
The U.S. health department rates Medicare Advantage and prescription‑drug plans on a one‑to‑five‑star scale. Higher ratings trigger billions of dollars in bonus payments from the government and tend to attract more enrollees.
Humana’s improvement outpaces its larger rivals. J.P. Morgan estimates UnitedHealth’s share of plans rated four stars or higher will drop to about 67% from 81%, while CVS Health’s share is projected to fall to roughly 70% from 84%.
Overall, about 71% of Medicare Advantage prescription‑drug plan enrollees are expected to be in contracts that receive four stars or higher in 2027, according to the health department’s latest data.
Management focus credited for progress
Evercore ISI analyst Elizabeth Anderson highlighted Humana’s gains in drug‑plan quality, health‑plan quality and readmission metrics, noting that the improvement “reflects the importance management has placed on fixing this metric over the past year.”
Medicare Advantage plans provide coverage for adults aged 65 and older and for people with disabilities, operating on behalf of the federal government.
Humana’s strong showing in the star‑rating system is expected to boost both its revenue from government bonuses and its attractiveness to prospective members, reinforcing its position in the competitive health‑insurance market.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
