By Paige Minemyer
Humana’s stock took a tumble early on Wednesday after it revealed in a filing with the Securities and Exchange Commission that its Medicare Advantage star ratings had declined significantly.
The insurer said in the filing that based on preliminary 2025 MA data from the Centers for Medicare & Medicaid Services (CMS) just 1.6 million, or 25 per cent, of its members are currently enrolled in plans with four or more stars for 2025.
The main culprit is a drop in the star ratings for one of Humana’s key contracts, in which 45 per cent of its members are enrolled. Star ratings dropped from a 4.5-star score to a 3.5 star, Humana said. This contract also represents more than 90 per cent of the insurer’s group Medicare Advantage plans.
Humana said that it expects the star ratings results to hamper 2026 revenues, though it is taking steps to address the issues to avoid this. Humana’s shares were down by 15 per cent at about 10:30 a.m. ET on Wednesday, with other major insurers such as Elevance Health and Cigna also trending down slightly.
In the filing, Humana said that the changes are likely due to updates in how CMS calculates the star ratings.
“Based on the company’s review of the preliminary data provided by CMS, its reduction in star ratings was driven by narrowly missing higher industry cut points on a small number of measures,” it wrote. “Humana believes there may be potential errors in CMS’ calculation of certain of its results and industry threshold cut points.”
Humana said it has “outstanding appeals” on some of the results and has asked CMS to provide additional details to “ensure the accuracy of threshold calculations.” It said it plans to continue engaging with CMS on this issue to ensure that the star ratings are calculated accurately.
Humana said it will provide greater detail on its strategies to improve star rating performance over the next several months, and it’s taking steps to improve member and provider engagement, enhance technology and boost the customer experience.
The insurer said the stars results are not expected to impact its performance in 2024 or 2025.
