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Humana Surges After Emerging as Top Beneficiary of 2027 Medicare Star Ratings
Humana said 95% of its Medicare Advantage members are in four-star-or-higher plans, lifting shares and widening the gap with rivals.
On Friday, Humana shares surged 15% after the insurer announced that 95% of its Medicare Advantage members will be in plans rated four stars or higher for 2027, a sharp improvement from 20% in 2026.
This turnaround stems from focused clinical engagement efforts, including outreach for overdue screenings that resulted in 28,000 completed mammograms and 93,000 colorectal cancer tests, directly boosting quality measures scored by the Centers for Medicare and Medicaid Services.
Analysts at J.P. Morgan noted Humana's ratings outshine larger rivals, with UnitedHealth's top-rated plan share falling to about 67% from 81% and CVS Health's to roughly 70% from 84%, while higher ratings unlock federal bonus payments worth billions.
Humana CEO Jim Rechtin said the ratings 'reflect the importance management has placed on fixing this metric over the past year,' as scores arrive before the October 15 Medicare Advantage Annual Election Period begins.
Despite the ratings boost, Humana reduced its Medicare Advantage coverage to just over 80% of U.S. counties, and because Star Ratings reset annually, the durability of these gains remains critical for long-term investor confidence.