The federal government's 2027 Medicare Advantage star ratings, released Oct. 9, produced a clear winner and a clear loser. Both STAT and Healthcare Dive agree that Humana staged a dramatic recovery, while Alignment Healthcare suffered a major downgrade. The ratings matter because plans with at least four stars receive bonus payments that total $13 billion annually across the industry, according to STAT.
Humana, the second-largest Medicare Advantage insurer, saw the percentage of its members in 4+ star plans rocket from 41% in 2026 to 93% in 2027, per Healthcare Dive's analysis. That rebound could generate $3 billion or more in extra revenue in 2028, the year payments adjust based on 2027 stars. Healthcare Dive notes that Humana's stock rose nearly 13% in postmarket trading on the news.
Alignment Healthcare was the biggest loser: its largest contract, covering about three-fourths of its 280,000 members, slipped below the 4-star threshold. Next year only 25% of its members will be in 4+ star plans, down from 98% currently, and the company could lose more than $170 million in 2028 revenue. Both outlets report that Alignment has threatened to sue the government over its downgrade, a now-common response from insurers unhappy with their ratings.
The two sources differ somewhat in emphasis. STAT highlights the deep uncertainty surrounding the ratings and the prevalence of litigation, while Healthcare Dive provides more granular detail on the methodology changes that made higher scores harder to achieve. Overall, the share of Medicare Advantage plans with drug coverage earning 4+ stars fell to 37% from 44%, and the enrollment-weighted average rating dipped to 3.99 from 4.01, according to Healthcare Dive.