By Amina Niasse and Sahil Pandey
Oct 8 (Reuters) – The US government said on Thursday that about 71% of Medicare Advantage prescription drug plan enrollees are currently in contracts that will have quality ratings of four stars or higher in 2027, a measure aimed at helping consumers compare health plans.
The Centers for Medicare & Medicaid Services, part of the US Department of Health and Human Services, rates Medicare Advantage and prescription drug plans on a scale of one to five stars, with five stars indicating the highest quality. Higher ratings lead to bonus payments from the government that collectively amount to billions of dollars and boost plan enrollment.
About 95% of Humana members were enrolled in plans that scored four stars or higher, according to an Oppenheimer calculation, a 53% improvement compared with the year prior.
Oppenheimer analyst Michael Wiederhorn said improved scores could add $3.6 billion for Humana in revenue and provide greater visibility into future earnings.
Average ratings for UnitedHealth and CVS declined 15% from the year prior, Wiederhorn said, while Elevance and Centene fell 10% and 9%, respectively.
Shares of Humana rose about 14% in extended trading, while those of UnitedHealth and CVS Health fell about 0.5% and 4%, respectively.
The government posted a low performance warning for a California-based prescription drug plan operated by CVS Health’s Aetna insurance unit.
Aetna President Steve Nelson said the company’s performance ratings reflected progress in its clinical services and improved health outcomes for members.
UnitedHealth Group, one of the largest providers of Medicare Advantage plans in the United States, said the ratings were in line with its expectations.
The companies operate government-backed Medicare Advantage plans for adults aged 65 and older and people with disabilities. CMS will pay insurers over $13 billion in bonus payments in 2026, according to data from health policy research firm KFF.
CMS also said about 37% of Medicare Advantage prescription drug contracts that will be offered in 2027 earned four stars or higher for their overall rating.
The ratings are designed to help beneficiaries compare plans based on factors such as customer satisfaction, access to care and management of chronic conditions. Five-star plans attract more members and can enroll new ones round the year.
The 2027 ratings will be displayed during Medicare open enrollment, which runs from October 15 through December 7, and will affect 2028 Medicare Advantage quality bonus payments.
UnitedHealthcare and Aetna can offset reductions in bonus payments with membership changes and private health plans the companies operate, Oppenheimer’s Wiederhorn said.
A spokesperson for Humana did not immediately respond to a Reuters request for comment.
“These results provide a strong foundation for further progress and we look forward to working with CMS as it modernizes the Star Ratings program,” a spokesperson for UnitedHealthcare said.
(Reporting by Sahil Pandey in Bengaluru and Amina Niasse in New York; Editing by Maju Samuel and Diti Pujara)
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