Humana provides a peek into its Medicare Advantage plan ratings, and the stock jumps

By Tomi Kilgore

An inadvertent posting of Medicare Advantage's Star Ratings by the government showed Humana's better plans got more stars

Humana's stock spiked after the health insurer disclosed some findings from the government's ratings for its 2026 Medicare Advantage plans.

Shares of Humana Inc. rode a midday bump up to a nice gain on Thursday, after the health insurer said that while it wasn't happy with the government's assessment of its Medicare Advantage plans, it's pleased that the ratings showed some improvement.

For a company that has been dogged for a while by the weakening of its Medicare Advantage (MA) business, as well as widespread uncertainty over potential changes in government policy regarding healthcare coverage, any ratings improvement is another sign that Humana may have turned a corner.

The stock (HUM) rallied 4% on Thursday, putting it in positive territory for the year. That comes after it had plunged a combined 50.5% from 2023 through 2024, which was the stock's worst two-year performance since it sank 60.5% in the 1998-99 period.

Read: Has Humana turned the corner? Stock jumps as outlook raised, Medicare business improves.

Humana said Thursday that it got an early peak at the 2026 Medicare Advantage Star Ratings, which the Centers for Medicare and Medicaid Services "inadvertently" made accessible for "a period of time" on Wednesday.

The company said about 1.2 million, or 20%, of its MA members are enrolled in plans rated 4 stars (out of 5) or above for 2026, which is about the same as the average rating of its 2025 plans. But the percentage of members in MA plans rated at 4.5 stars will jump to 14% for 2026, from 3% in 2025.

And the ratings are expected to improve even more in 2027.

"The percent of members expected to be enrolled in contracts rated 4 stars and above in 2027 (the payment year impacted by 2026 MA Star Ratings) is meaningfully higher than the approximately 20% noted above, which is based on current MA membership and contract distribution," the company said.

The ratings are very important for MA plan providers, because the government pays a higher rebate for plans with more stars.

Just before Humana disclosed the news about the Star Ratings at midday Thursday, the stock was down about 0.4% on the day. It spiked as much as 8.1% in the minutes after the disclosure, before paring gains into the closing bell.

Separately, the company affirmed its outlook for 2025 adjusted earnings per share, which excludes nonrecurring items, of $17. That's up from $16.21 in 2024, and compares with the current average analyst estimate compiled by FactSet of $17.04.

The company is slated to report third-quarter results on Nov. 5, before the market opens.

Humana's stock has gained 1.2% in 2025, while the Health Care Select Sector SPDR ETF XLV has tacked on 4.1% and the S&P 500 index SPX has advanced 14.2%.

-Tomi Kilgore

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10-02-25 1802ET