Humana Surges as 95% of Its Medicare Advantage Members Land in 4-Star Plans for 2027

HUM shares surged after the Centers for Medicare & Medicaid Services released its 2027 Medicare Advantage star ratings after Thursday's close, with analysts naming Humana the top beneficiary. The stock rose about 13% in after-hours trading Thursday and was up as much as 16% in Friday's premarket; it was trading about 12.6% higher at $435.85 in late morning, per SentiSense data.

The numbers explain the move. Humana said 95% of its Medicare Advantage members are in plans rated 4 stars or higher for 2027, up from 20% for 2026, with 42% in 4.5-star plans. Its largest contract rose to 4 stars from 3.5. Star ratings drive the quality bonus payments plans receive, and Evercore ISI's Elizabeth Anderson estimates Humana could receive $4.8 billion in bonus payments in 2028. J.P. Morgan had expected 60% to 70% of members in 4-star plans, well below the actual figure.

The update was not a sector-wide win. CMS added measures and raised thresholds, and the industry share of members in 4-star-or-higher plans fell to 37% from 44%, according to Healthcare Dive. CVS fell to about 70% from 84% and UNH to about 67% from 81%; CVS shares slid about 3% while UnitedHealth held roughly steady in early trading. ALHC fell more than 20% after its largest California contract dropped to 3.5 stars from 4.

The ratings reset Humana's 2028 revenue picture after two years of weak scores, but the bonuses arrive with a lag and ratings are recalculated every year. Watch Humana's commentary on 2028 margins at its next earnings report, and whether Alignment's threatened challenge to the methodology leads CMS to revisit any scores.