Humana lifts share of members in highly rated Medicare plans to 95% for 2027
Key Facts
Humana said 95% of its Medicare Advantage members are enrolled in plans rated four stars or higher for 2027, an improvement tied to quality bonuses insurers receive for qualifying contracts. The announcement came on October 9, 2026, marking a sharp turnaround from the previous year's ratings, according to the company's statement and Reuters coverage. The corresponding share was 20% in the 2026 ratings, Reuters reported. The result exceeded JPMorgan's expectations of between 60% and 70% of members in highly rated plans. The new ratings will affect quality bonus payments for 2028, according to the Centers for Medicare & Medicaid Services.
Detailing the improvement in quality measures, Humana said it addressed "663,000 additional care opportunities" compared with the previous year. It added that 534,000 more members completed an annual wellness visit over the same comparison period. These results form part of the improvement the company reported in care measures alongside higher plan ratings. The Centers for Medicare & Medicaid Services uses up to 43 quality and performance measures to assess Medicare Advantage contracts that include prescription drug coverage. The agency recalculates rating thresholds annually based on performance during the measurement period, causing ratings to change from year to year.
Across the industry, the Centers for Medicare & Medicaid Services said about 71% of Medicare Advantage members with prescription drug coverage are currently enrolled in contracts that will receive four stars or higher for 2027. Among contracts offered for that year, about 37% have those ratings. They total 188 contracts, according to figures published by the agency. A larger share of members is therefore concentrated in highly rated contracts than those contracts' share of the total available. The agency's industry figures cover contracts combining Medicare Advantage and prescription drug coverage.
Humana said in its filing with the U.S. Securities and Exchange Commission that it exceeded its target for performance in the top quartile of its peer group. The company defines that target as monthly star-related revenue per member that is 10% above the peer-group median. The benchmark links the company's position among its peers to ratings-related revenue, alongside the proportion of members covered by highly rated plans. Evercore ISI analyst Elizabeth Anderson estimated Humana could receive $4.8 billion in bonuses in 2028 as a result of the improvement, according to Reuters. The company expected some of its outperformance against its target to be temporary and said it would use it for nonrecurring investments and shareholder returns.
Humana shares rose 15% during trading on Friday, October 9, 2026, following the ratings results, according to Reuters coverage that day. The stock's rise came as the company maintained its financial guidance for the current year in its regulatory filing. Humana reaffirmed its forecast for 2026 adjusted earnings per share of at least $9.00. The actual benefit from the ratings improvement remains dependent on membership, contract mix, pricing and risk factors, according to the company. It thus distinguishes between the impact of the quality results on its future payments and the earnings guidance it maintained for the current year.
The ratings announcement coincided with the approach of Medicare's open enrollment season, which the Centers for Medicare & Medicaid Services set to begin on October 15, 2026. Enrollment runs through December 7, 2026, according to the agency's published schedule. A virtual investor update scheduled by Humana for December 10, 2026, will follow. The company said in its filing that the meeting would review its earnings growth framework. It will also cover initiatives supporting that framework, at the next date the company announced for presenting its outlook to investors.