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Humana anticipates that 20% of its Medicare Advantage enrollees will be in plans rated 4 stars or higher in 2026, reflecting a slight decrease from 2025 but aligning with the company’s internal projections, as revealed on Thursday.
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As the second-largest Medicare Advantage provider in the U.S., Humana reported an increase in members enrolled in plans rated 4.5 stars or above. The company projects that 14% of its MA members will be in these top-rated plans next year, a rise from just 3% in 2025.
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Humana’s average star rating stands at 3.61, showing stability compared to the previous year. Despite ongoing efforts to enhance its ratings, the company expressed disappointment with the outcomes. Nonetheless, Humana’s stock experienced a roughly 3% increase in Thursday’s trading following the announcement.
This period is notably busy for those monitoring the insurance market, especially with the Centers for Medicare & Medicaid Services (CMS) releasing additional details about the Medicare Advantage landscape for the upcoming year, albeit mistakenly.
On Wednesday, regulators shared more granular information about MA plan offerings for 2026 and unintentionally made some star ratings data public, prompting Humana to proactively disclose this information to its investors.
While Humana’s average star rating has remained largely stable, the overall results are likely underwhelming for the company. This is largely due to the decrease in the percentage of MA members in plans rated 4 stars or more, which fell from 25% this year.
For additional context, Humana boasted 94% of its members in plans rated at least 4 stars in 2024.
Achieving this standard is crucial for insurers participating in the privatized Medicare program, as plans that receive a rating of 4 stars or higher qualify for enhanced bonus payments. Additionally, higher ratings yield larger rebates for plans bidding below the CMS benchmark for the following year.
Humana anticipates losing billions in revenue due to the decline in star ratings from 2024 to 2025, and another drop for 2026 would exacerbate the situation.
“While the Company is not satisfied with its 2026 Star Ratings, it appreciates the operational enhancements made during the latter part of the 2026 measurement cycle, laying a strong groundwork for a projected return to Top Quartile results for the 2027 Star Ratings,” Humana mentioned in its securities filing.
In addition to taking legal action against the government in efforts to enhance its scores, Humana has been diligently working to improve its ratings by addressing care disparities, enhancing member engagement, and investing in technology, as noted by company executives.
