Humana Surges 12% as 95% of Its Medicare Members Land in 4-Star Plans, Up From 20%

Humana (NYSE: HUM) is up sharply Friday after the company said 95% of its Medicare Advantage members will be in plans rated at least four stars for 2027, far above what Wall Street expected. The shares jumped about 15% in premarket trading and were up 12.23% at $435.42 as of 12:28 PM ET. Higher ratings can qualify insurers for federal quality bonus payments, and the 2027 ratings will influence payments in 2028.

What changed in the star ratings

The Centers for Medicare & Medicaid Services released the 2027 ratings on Oct. 8. Humana's share of members in plans rated four stars or higher rose to 95%, from about 20% in the 2026 ratings. J.P. Morgan had expected only 60% to 70%. Humana's largest Medicare Advantage contract, which covers about 2 million members, moved up from 3.5 to 4 stars, putting it back above the bonus threshold.

Humana's ratings had fallen sharply in the 2025 round, which threatened its bonus payments. It lost a lawsuit over how those ratings were calculated in October 2025, and in February it forecast 2026 profit below Wall Street estimates. Friday's results reverse much of that damage.

Why the ratings matter for earnings

Plans rated four stars or higher can qualify for federal quality bonuses, which can add up to billions of dollars for large insurers. Evercore ISI analyst Elizabeth Anderson said Humana could receive $4.8 billion in bonus payments in 2028, crediting improvements in drug-plan quality, health-plan quality and readmissions measures. The actual benefit depends on enrollment and payment calculations. Baird analysts noted that the profit boost also depends on how much Humana reinvests in member benefits and provider arrangements.

Analysts react

Analyst actions are as reported by The Fly via Stocktwits. Price targets are opinions and can change.

How rivals stack up

The gains are relative. J.P. Morgan estimates that the share of UnitedHealth members in plans rated four stars or higher will fall to about 67% from 81%, and CVS Health's share to about 70% from 84%. Across the industry, about 71% of Medicare Advantage prescription drug plan enrollees are in contracts rated four stars or higher in 2027, according to the federal health department.

Reuters reported UNH up about 1.4% and CVS down about 0.8% at the time of its report, so the market treated this mainly as a Humana story. The moves are intraday and can change.