Humana Raises Share of Members in Highly Rated Plans to 95% for 2027
Key Facts
Humana said 95% of its Medicare Advantage members are enrolled in plans rated 4 stars or higher for 2027, an improvement from the previous year's figures. The ratings were issued by the U.S. Centers for Medicare & Medicaid Services, while Evercore analyzed the company's results. Humana had disclosed in its preliminary 2026 ratings data that about 20% of its members were in plans at that rating level. The company said 42% of its members are enrolled in plans rated 4.5 stars under the new results. Its largest plan, H5216, regained a 4-star rating, according to Evercore analysis cited by Investing.com.
The improvement follows Humana's announcement that it is implementing a strategy to diversify its Medicare Advantage contracts, according to its earlier filing with the U.S. Securities and Exchange Commission. The company linked its results to efforts to make preventive care easier for members to access. It said those efforts helped "detect diseases early and improve health outcomes." On the rules for calculating ratings, the Centers for Medicare & Medicaid Services decided to retain the historical reward factor in the 2027 ratings. Under the final rule, the regulator did not implement the "Excellent Health Outcomes for All" reward that had been scheduled to replace it.
Across the industry, about 37% of Medicare Advantage contracts that include prescription drug coverage and are scheduled to be offered in 2027 received ratings of 4 stars or higher, according to the U.S. agency. A total of 188 contracts reached that threshold in the new annual ratings. Measured by enrollment, about 71% of members are currently in contracts that will receive that rating in 2027. In its financial disclosure, Humana said it exceeded its target for performance in the top quartile of its peer group based on ratings revenue. The company defines that target as monthly revenue per member 10% above the group's median, the benchmark it uses to assess its financial performance linked to the ratings.
The 2027 ratings affect Medicare Advantage quality bonus payments for 2028, according to the Centers for Medicare & Medicaid Services. Evercore ISI analyst Elizabeth Anderson estimated that Humana could receive $4.8 billion in bonuses that year, Reuters reported. Humana linked actual ratings revenue to the membership level it achieves in 2028. That revenue also depends on the distribution of members across contracts in the same year, according to the company's SEC filing. Payment calculation factors also help determine the final amount the company will receive from the new ratings.
In the market, Reuters reported that Humana shares, traded under the ticker HUM, rose 15% on Friday, October 9, following the release of the new ratings. The stock had closed at $396.51 in the October 7, 2026 session, according to EL7 data. It then closed at $387.12 on October 8, the session preceding the Friday move reported by the agency. Regarding the expected financial impact, Humana described part of the anticipated benefit from its ratings outperformance as temporary. It said in its filing that it intends to direct this benefit toward one-time investments, as part of its plan for using the returns linked to its new performance.
Humana's announced uses for the expected temporary benefit include returning value to shareholders, alongside its planned investments. On enrollment, the open enrollment period begins on October 15, 2026, according to the schedule announced by the Centers for Medicare & Medicaid Services. The period ends on December 7, 2026, ahead of the date the company has set for an investor update. Humana intends to hold that update virtually on December 10, 2026, according to its financial disclosure. It said the meeting will present progress in implementing its strategic framework.