Humana shares jump 15% after star ratings announcement
Humana said Friday that 95% of its Medicare Advantage members are enrolled in plans rated at least four stars for 2027, an improvement that could make more of its membership eligible for quality-related bonus payments in 2028.
Shares jumped 15%, to $444.01, in premarket trading after the announcement.
Humana said 18 of its Medicare Advantage contracts received ratings of at least four stars from the Centers for Medicare and Medicaid Services, up from seven contracts a year earlier. About 42% of Humana’s Medicare Advantage members are enrolled in 4.5-star plans. The company’s prescription drug plan contract also received a 4.5-star rating for 2027, the company said.
The ratings assess health plans on measures including quality of care, member experience and customer service. Investors watch them closely because Medicare Advantage plans rated at least four stars can qualify for quality bonus payments, subject to federal program rules. The 2027 ratings will affect payments in 2028.
The improved ratings could support Humana’s efforts to strengthen its Medicare Advantage margins, though the financial impact will depend on enrollment in qualifying contracts and applicable payment calculations.
Humana also reported improvements in preventive care, saying 663,000 more care opportunities were met and 534,000 additional members completed annual preventive visits compared with the prior year.
“We’re extremely proud of these Star Ratings,” Chief Executive Jim Rechtin said, attributing the improvement to employees’ efforts to provide members with high-quality care and coordinated support.