Humana Faces Star Rating Drop Affecting Medicare Advantage Revenue

Humana is facing a significant drop in the percentage of its Medicare Advantage members enrolled in plans rated 4 stars or higher for 2025, which will likely negatively impact its revenues in 2026. Preliminary data from CMS shows that only 25% of members, around 1.6 million, are in top-rated plans, down from 94% in 2024. This decrease is primarily due to a major contract falling from a 4.5-star rating to 3.5 stars, affecting nearly half of Humana's MA membership. The company has raised concerns about potential errors in CMS's calculations and is exploring avenues to mitigate potential revenue losses for 2026. Additionally, Humana will discontinue Medicare Advantage plans in 13 counties, which will affect approximately 560,000 beneficiaries. Despite these challenges, the company assures its outlook for 2024 and 2025 remains unaffected.