Humana Cuts 2026 Profit Forecast on Lower Medicare Ratings
Health insurer Humana reduced its full-year earnings outlook after lower Medicare Advantage Star Ratings decreased the quality bonuses it receives from the federal government. The company now expects adjusted earnings per share for 2026 to be lower than previously forecast, citing the impact of reduced bonus payments tied to the ratings. Humana's stock fell following the announcement. The Star Ratings system, which measures quality and performance of Medicare Advantage plans, directly affects the bonus payments insurers receive. A drop in ratings means smaller bonuses, squeezing profitability. Humana is one of the largest providers of Medicare Advantage plans, making it particularly sensitive to changes in the rating system. The revised outlook reflects the financial pressure from lower ratings, which have been a challenge for many insurers in the sector.
Key facts
- Humana cut its full-year earnings outlook for 2026.
- Lower Medicare Advantage Star Ratings reduced quality bonuses from the federal government.
- Adjusted earnings per share forecast was lowered.
- Humana's stock price declined after the announcement.
- Star Ratings measure quality and performance of Medicare Advantage plans.
- Lower ratings result in smaller bonus payments to insurers.
- Humana is a major provider of Medicare Advantage plans.
- The revised outlook highlights financial pressure from reduced ratings.
Entities
Institutions
- Humana
- federal government
Sources
- Quartz —