The percentage of Humana Medicare Advantage members enrolled in plans rated 4 stars or higher for 2025 has dropped significantly, which is expected to negatively affect 2026 revenues.
Based on preliminary 2025 MA Star Ratings data from CMS, Humana has approximately 1.6 million, or 25%, of its members currently enrolled in plans rated 4 stars and above for 2025, a reduction from 94% in 2024, according to regulatory documents filed Oct. 2.
The drop was largely driven by the a major contract falling from a 4.5-star rating to 3.5 stars, impacting nearly half of MA membership and most employer group plans.
"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," the company wrote. "Humana believes there may be potential errors in CMS' calculation of certain of its results and industry threshold cut points."
Humana expects the decline to affect quality bonus payments in 2026, and it is exploring options to address potential revenue loss in 2026 if its appeals with CMS are not successful. The ratings drop will not affect the company's 2024 or 2025 financial outlook.
In September, Humana said it will stop offering Medicare Advantage in 13 counties in 2025, driven by rising medical costs and lower reimbursements from CMS. The exits will affect around 560,000 beneficiaries, or 10% of Humana's MA membership. The company expects to retain around half of the members affected by plan exits, and in most areas where it is ending plans, the company has another plan available.