Humana soars ~15% premarket after CMS raises key Medicare Advantage contract to 4 stars, unlocking bonus payments
What happened
The Centers for Medicare & Medicaid Services raised the Star Rating of one of Humana's key Medicare Advantage contracts to 4 stars from 3.5 stars, making the plan — which covers 2.4 million members — eligible for federal bonus payments. Humana stock surged about 14-15% in premarket trading Friday, to around $445, gapping out of a cup-with-handle base. Leerink Partners called Humana 'the clearest positive big winner' in its 2027 Stars analysis, estimating ~96% of Humana members will be in 4+ star plans for 2027, up from 42% this year. Oppenheimer's Michael Wiederhorn estimated the improved scores could add $3.6 billion in revenue for Humana.
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Start your free 14-day trialWho’s affected & sources
Who’s affected
- Humana (HUM): strongly positive — back above the bonus threshold on its largest contract
- CVS Health (CVS): negative — three big MA contracts fell to 3.5 stars from 4, -2%; Aetna also got a low-performance warning on a California PDP plan
- UnitedHealth (UNH): mildly negative — average ratings declined ~15% from prior year, -0.5%
- Alignment Health Care (ALHC): sharply negative — big California plan fell to 3.5 stars, -24%
- Clover Health (CLOV): positive — two MA contracts at 4+ stars, +11%