Humana Says 2027 Star Ratings Clear Its Top-Quartile Goal, And Some 2028 Upside Will Be One-Time
An 8-K affirms 2026 adjusted EPS guidance of at least $9.00 and sets December 10 as the date of a virtual investor update.
Humana said in an 8-K filed Friday that its final 2027 Medicare Advantage Star Ratings put it above its own "Top Quartile" goal. The insurer also affirmed 2026 adjusted earnings guidance of at least $9.00 per share.
What the 8-K says about Stars
The ratings data, for what the filing calls Bonus Year 2028, was provided by the Centers for Medicare and Medicaid Services on October 8. Humana defines Top Quartile as Stars revenue per member per month 10% above the median of its peer group.
The peers are Centene, CVS, Elevance, HCSC and United. Stars revenue here means the extra revenue from earning a 3.5, 4 or 4.5 Star rating, including the rebate retained and the quality bonus payment for a 4 Star rating.
To make payers comparable, the calculation uses a 3.0 benchmark of $1,370, a risk score of 1.15 and a rebate of $222 for everyone. It uses September 2026 CMS membership files. Humana cautions that actual 2028 Stars revenue will differ, since it depends on 2028 membership, contract mix, risk scores, benchmark and rebates.
Bloomberg Law reported that Humana's largest Medicare Advantage contract, covering more than 2 million members, moved above the bonus-payment threshold in ratings CMS released Thursday.
What it changes for holders
Humana says it will manage its products and benefits assuming results that approximate Top Quartile. It anticipates that "some" of its 2028 outperformance relative to that level will be one-time, and says it will manage expenses accordingly.
The company therefore expects a 2028 benefit to be used for one-time investments and returns to shareholders. It has not sized the benefit or fixed its use. Details will come once it has more 2028 information, including competitive dynamics, the rate and regulatory environment, and its expected contract mix and membership.
On 2026, the adjusted EPS floor of $9.00 matches guidance from a July 29 press release, affirmed in an 8-K filed September 1. Humana does not expect that figure to change. It does expect possible changes to GAAP (standard accounting) EPS guidance because of value creation and other strategic initiatives. It cannot yet reconcile the two, as it is still closing the books for the quarter ended September 30, and calls the guidance preliminary.
What to watch
Humana will hold a virtual investor update on December 10, 2026, to compare progress against the framework from its 2025 Investor Day. It plans to share the level and use of the one-time benefit before or during detailed 2028 guidance on the fourth-quarter 2027 earnings call.
Until then, the filing gives no dollar size for the 2028 benefit, only the direction and the date by which Humana says it will explain it.
Sources
- 8-K Filing — HUMANA INC (HUM) — SEC EDGAR
- Humana Stock Soars On Medicare Advantage Star Rating | Investor's Business Daily — investors.com
- Humana Surges on Medicare Quality Ratings Improvement — news.bloomberglaw.com
- Humana Stock Surges After Key Medicare Advantage Plan Gets Higher Rating — Barron's
- Is Humana (HUM) Stock Priced For Its Stronger Earnings Outlook? — Yahoo Finance
