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Humana HUM.N said Wednesday that a lower performance rating for a widely used Medicare insurance plan hurt enrollment for 2025 and will potentially affect the health insurer’s revenue and bonus payments in 2026, sending shares down about 23% pre-market.
The company said it has about 1.6 million, or 25% of its members, currently enrolled in plans rated 4 stars and above for 2025, down from 94% in 2024.
The star rating for a Humana contract, which represents about 45% of its Medicare Advantage members, fell to 3.5 in 2025, from 4.5 a year earlier, according to preliminary data released by the Centers for Medicare & Medicaid Services Tuesday.
Humana said the reduction in its stars was because it narrowly missed higher industry thresholds on a small number of metrics, and that was the reason for the decline in enrollment in its plans top rated for 2025.
The star rating, on a scale of 5, determines reimbursement levels and can influence the choice of policyholders.
The company’s shares, which have fallen nearly 39% since the start of the year, fell to $208.10 before market close Tuesday.
“Humana is investigating all available options to mitigate the projected 2026 revenue loss related to its 2025 Stars,” the company said.
The drop in stars for 2025 will impact Humana’s quality bonus payments in 2026, the company said.
Humana said it believes “there may be potential errors” in the federal agency’s calculation of certain industry-wide results and points.
She said appeals regarding some of the findings were ongoing and she had requested additional information from the agency.
Health insurers, which offer Medicare Advantage plans, are paid by the government to manage health care for people age 65 and older or people with disabilities.
Star rating details for 2025 are expected to be officially released by the agency on or around October 10.
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