Oct 9 (Reuters) – Humana’s shares rose 15% in premarket trading on Friday after analysts said the health insurer is the biggest beneficiary of the new star ratings for 2027 Medicare Advantage plans.
Humana said 95% of its Medicare Advantage members will be enrolled in plans rated four stars or higher in 2027, up sharply from 20% in 2026, as measures of care quality and member experience improved.
Analysts at J.P. Morgan said they had expected 60% to 70%.
The US health department rates Medicare Advantage and prescription drug plans on a scale of one to five stars. Higher ratings lead to bonus payments from the government that amount to billions of dollars and boost plan enrollment.
Analysts say Humana’s ratings outshine those of larger rivals: J.P. Morgan estimates UnitedHealth’s share of plans rated four stars or higher will fall to about 67% from 81% and that of CVS Health to roughly 70% from 84%.
Overall, about 71% of Medicare Advantage prescription drug plan enrollees are in contracts that will be rated four stars or higher in 2027, the health department said late on Thursday.
Humana has improved in measures of drug-plan quality, health-plan quality and readmissions, said Evercore ISI analyst Elizabeth Anderson.
The improvement “reflects the importance management has placed on fixing this metric over the past year,” she said.
Health insurers provide Medicare Advantage plans for adults aged 65 and older and people with disabilities, on behalf of the government.
(Reporting by Christy Santhosh in Bengaluru; Editing by Sahal Muhammed)
Comments