Health-Insurance Stocks Get a Lift From Early Release of Data on Humana

Humana CEO Jim Rechtin said that while the company isn’t satisfied with its star ratings for 2026, it wasn’t surprised by them. (Dreamstime)

A glitch that gave investors an early peek at downbeat news about Humana is turning out to be a positive for shares of the health insurer and its rivals.

Humana has 20% of its members enrolled in Medicare Advantage plans rated four stars or above for 2026, the company said in a Securities and Exchange Commission filing Thursday. That is down from 25% in 2025, but in line with the company’s assumptions for its multiyear financial planning.

The company reaffirmed both its short- and long-term financial guidance based on the news.

The quality-based star ratings are crucial. Cash bonuses that the Centers for Medicare and Medicaid Services pay to companies with high ratings boost profits for insurers’ Medicare Advantage businesses. Humana specializes in Medicare Advantage plans.

“We are certainly not satisfied with these results. However, we are not surprised by them,” said CEO Jim Rechtin in an impromptu conference call.

Preliminary 2026 star-ratings data were inadvertently available on a CMS website on Wednesday, Humana said. The agency, much of whose work has been affected by the government shutdown, didn’t immediately respond to a request for comment on why these numbers were disclosed and whether they were accurate.

Humana stock was up 8.8% to $279.28 Friday, having climbed 4% on Thursday.

Other major insurers didn’t release preliminary ratings data this week, but were also rising. Centene stock was up 4.3% and CVS Health rose 0.9%. UnitedHealth Group, which disclosed preliminary star-year 2026 quality-rating data last month, was up 2.8%.

Humana expects to return to the top quartile for 2027 star ratings, which would boost its 2028 reimbursements, analysts at Oppenheimer & Co said. The firm reiterated an Outperform rating and a $310 price target for the stock.

“Overall, Humana’s 4+ Star rating exposure remains well below
historical levels, but the company remains on-track with its multi-year turnaround,” wrote analyst Michael Wiederhorn in a research note.

Wall Street had also largely priced in Humana’s disappointing 2026 quality ratings, said Mizuho Securities. Shares were down 1.7% for the year through the close on Wednesday.

Humana’s reiteration of both its short- and long-term earnings guidance and its expectations for 2027 Medicare Advantage ratings were positive updates, the firm said. Mizuho reiterated an Outperform rating for the stock and a $300 price target in a research note.

The iShares U.S. Healthcare Providers ETF was up 2.2% Friday. The fund rose 1.2% the day before.

Write to Nate Wolf at nate.wolf@barrons.com