Humana beats Medicare star rating goal, affirms 2026 earnings guidance

Louisville, October 9. Humana Inc. announced that its final 2027 Medicare Advantage star ratings exceeded the company's internal target for top quartile performance, a result the insurer stated will generate a one-time financial benefit in 2028. The company simultaneously reaffirmed its guidance for at least $9.00 in adjusted earnings per common share for the fiscal year ending December 31, 2026.

The performance data, released by the Centers for Medicare and Medicaid Services (CMS) on October 8, 2026, covers the Bonus Year 2028 cycle. Humana defined its top quartile goal as stars revenue per member per month (PMPM) at least 10% above the peer group median. The peer group for this comparison includes Centene, CVS, Elevance, HCSC, and United. The company's calculation normalized for plan design, geographic mix, and membership mix using a consistent 3.0 benchmark of $1,370, a risk score of 1.15, and a rebate of $222. Humana noted that actual 2028 stars revenue PMPM will differ from these normalized figures based on final membership, contract mix, risk scores, benchmarks, and rebates.

Humana's President and Chief Executive Officer, Jim Rechtin, provided supplementary audio commentary on the results via the company's investor relations page. The company stated that it anticipates some of the outperformance in Bonus Year 2028 relative to its top quartile goal will be one-time in nature. Consequently, Humana expects to use the resulting 2028 benefit for one-time investments and returns to shareholders. Management plans to disclose the specific level and expected use of this one-time benefit before or during the detailed 2028 financial guidance provided on the fourth quarter 2027 earnings call. This timing will allow the company to incorporate insights into competitive dynamics, the rate and regulatory environment, and its expected contract and membership mix.

The filing signed by John-Paul W. Felter, Senior Vice President, Chief Accounting Officer and Controller, confirms that Humana intends to manage its product and benefit structure assuming performance that approximates top quartile results. The company believes it is positioned to deliver on its commitment to unlock earnings potential by 2028, a goal set at its 2025 Investor Day. This positioning is supported by an expanded membership base, the return to top quartile stars results, and continued discipline in pricing, clinical excellence, operating efficiencies, and capital allocation.

Humana will hold a virtual investor update on December 10, 2026, to provide a mark to market against the framework established at its 2025 Investor Day. This update will include details on initiatives expected to support earnings growth through 2028. Regarding its current fiscal year, Humana affirmed its July 29, 2026 guidance of at least $9.00 in adjusted EPS for FY 2026. The company stated it is unable to reconcile this non-GAAP measure to GAAP diluted earnings per share without unreasonable effort because it is still completing the financial close process for the periods ended September 30, 2026. While Humana does not expect changes to its FY 2026 adjusted EPS guidance, it expects potential changes to its GAAP EPS guidance due to ongoing value creation and strategic initiatives.