Humana plunges as government cuts Medicare quality rating
Company “is disappointed with its performance.”
Shares of Louisville, Ky., based Humana crashed in early trading on Wednesday, after the health insurer disclosed that a key government regulator cut the quality rating of one plan that accounts for nearly half its Medicare Advantage enrollment.
In an SEC filing, the company said preliminary 2025 Medicare Advantage “star ratings” provided by the Centers for Medicare and Medicaid Services for its largest Medicare Advantage plan — known as H5216 — were reduced from 4.5 stars to 3.5 stars.
This rating matters because the drop in stars impacts the “quality bonus payments” which were created by the Affordable Care Act in 2010 as a means of incentivizing quality care from insurers. These bonus payments are given only to plans that receive four or more stars.
While Humana says it is appealing the star rating cut on its H5216 plan — home to 45% of its Medicare Advantage enrollment — the company says it "is disappointed with its performance and has initiatives underway focused on improving its operating discipline and returning to an industry-leading stars position as quickly as possible.”
