Humana Shares Plunge After Medicare Plan Ratings Drop

The insurer's Medicare Advantage plans see a significant downgrade, impacting future revenue and bonus payments.

Humana's Medicare Advantage star ratings for 2025 dropped, with only 25% of members enrolled in plans rated 4 stars or above, down from 94% in 2024.
The star rating for a key contract, which includes 45% of Humana's Medicare Advantage members, fell from 4.5 to 3.5 stars.
This ratings decline could lead to a $1.9 billion revenue hit in 2026 due to reduced quality bonus payments.
Humana is appealing the ratings and has requested additional information from the Medicaid Services to address potential calculation errors.
The company's stock has fallen 39% this year, with a sharp 23% drop following the announcement of the ratings downgrade.