Humana says 95% of Medicare Advantage members are in 4-star plans for 2027
Oct 12, 2026
Humana (NYSE: HUM) said on Friday, October 9, 2026, that 95% of its Medicare Advantage members are enrolled in plans rated 4.0 stars or above for 2027. The figures are based on the annual star ratings published by the US Centers for Medicare & Medicaid Services (CMS). Humana shares rose about 12% during trading on October 9.
What Humana reported
According to Humana's announcement:
- 95% of its Medicare Advantage members are in plans rated 4.0 stars or above for 2027
- 42% of its Medicare Advantage members are in plans rated 4.5 stars
- six Medicare Advantage contracts are rated 4.5 stars and 12 are rated 4.0 stars
- its stand-alone prescription drug plan contract is rated 4.5 stars
- it has 11 more contracts rated 4.0 stars or above than in the prior year
Chief executive Jim Rechtin said the company was "extremely proud" of the ratings. Humana did not comment on financial impact or guidance in the announcement.
Comparison with the previous year
The 2027 ratings follow weaker results in the previous rating cycle. For 2026, Humana said about 20% of its Medicare Advantage members were enrolled in plans rated 4 stars or above, according to its announcement in October 2025.
What are CMS star ratings?
CMS rates Medicare Advantage and prescription drug plans on a scale of one to five stars each year. The ratings are based on measures such as preventive care, management of chronic conditions, member experience and customer service. They are published in October and apply to the following year.
The ratings matter for insurers because plans rated 4 stars or above can qualify for quality bonus payments from the federal government. The ratings are also shown to people choosing a Medicare plan.
Analyst view
According to a report on the share move, one analyst estimated the improvement could be worth $3 billion or more in additional revenue for Humana in 2028. This is a single analyst estimate, not a company figure, and actual amounts depend on CMS payment rules, enrolment and other factors.
Other insurers
The new ratings affected insurers differently. Alignment Healthcare (NASDAQ: ALHC), a Medicare Advantage insurer focused on California, fell about 23% on October 9 after its largest contract was rated 3.5 stars, down from 4 stars, according to market reports.
Medicare Advantage in focus
Medicare Advantage is a private alternative to traditional Medicare in the US, offered by insurers such as Humana, UnitedHealth Group and CVS Health. Government payment rates, medical costs and star ratings are among the main factors that affect insurers' results in this business. Humana is one of the largest Medicare Advantage providers in the US, and the business accounts for a large share of its revenue.
Timeline
The 2027 star ratings apply to plans offered for the 2027 calendar year. Medicare's annual enrolment period, when people in the US can choose or change their Medicare plans for the following year, runs from October 15 to December 7. Quality bonus payments based on the ratings are generally reflected in payments in a later year.
Risks and uncertainties
Star ratings can change from year to year and can be subject to review or legal challenge. Bonus payments linked to the 2027 ratings would affect results in later years, and the amount depends on enrolment and CMS rules. Medical costs, regulatory changes and competition can also affect insurers' financial performance.
What this means for investors
For Investing.one users following HUM or ALHC, the 2027 star ratings may be relevant to the companies' future revenue. Humana is expected to provide more detail with its third-quarter results. The share price moves described above reflect a single trading session and may not continue.
Sources
- Humana press release (via Finviz/Business Wire)
- Yahoo Finance
- AskTraders
- Becker's Payer Issues (2026 ratings)
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