Dive Brief:
- Average Medicare Advantage star ratings for 2026 are essentially flat after a few consecutive years of declines — a good sign for the industry, which had braced itself for lower quality scores.
- Still, there was variation in major insurers’ results. The percentage of members in plans rated 4 stars or above, an important cutoff for payers, stayed stable for UnitedHealthcare, dropped for Humana and Aetna, and improved for Elevance and Centene — the five largest publicly traded payers in the privatized Medicare program.
- Perhaps the biggest loser is Clover Health. The insurer’s largest contract covering almost all of its MA members dropped below 4 stars — a slip that could cost Clover tens of millions of dollars in earnings, analysts estimate.
Dive Insight:
The CMS quietly released highly anticipated 2026 star ratings for MA insurers on Thursday evening. The agency normally issues a press release on the results, but has yet to do so. Operations may be hampered by the government shutdown — the HHS said communication would be affected in its contingency plan for a lapse in appropriations.
Still, the release of the 2026 data file showed weighted average stars rose slightly, from 3.96 to 3.98, according to an estimate from investment bank TD Cowen. That’s better than many industry watchers expected given regulators made the highest ratings more difficult to achieve, including by upping standards after the coronavirus pandemic and eliminating outliers from their calculations.
Insurers jockey aggressively for higher stars, which are tied directly to lucrative bonuses and competitive advantages in the MA program. It’s particularly important to payers that their MA contracts reach the 4-star cutoff, given that translates to higher bonus payments. Higher scores also result in larger rebates if plans submit bids below the CMS’ benchmark for the coming year.
UnitedHealthcare and Humana, the two largest MA insurers covering 10.3 million and 5.8 million members in the program, respectively, both previewed their 2026 stars early. The final results were in line with their initial expectations, with UnitedHealthcare having more than 77% of its members in plans rated 4 stars or above next year, roughly flat compared to 2025, according to a Healthcare Dive analysis of the CMS data.
Almost 20% of Humana’s members will be in plans with at least 4 stars next year, down from 25% this year.
CVS-owned Aetna, the third largest MA insurer with 4.2 million members, will have about 81% of its members in the highly rated plans. That’s down from 89% in 2025, though Aetna still leads its peers in the category.
Aetna president Steve Nelson said he was proud of the results in a statement on Thursday.
Meanwhile, 53% of Elevance’s 2.2 million MA members will be in plans with at least 4 stars next year, up from about 40% this year. The improvement is mostly due to one large contract moving from 3.5 to 4 stars.
Virtually all members covered by Kaiser, the fifth-largest MA insurer with almost 2 million members, will remain in plans with at least 4 stars. Finally Centene, the sixth-biggest player in the market, hiked the percentage of its members in the highly rated plans from 1% this year to more than 18% next year.
Humana and Aetna saw enrollment in highly rated plans drop while Elevance and Centene improved
Results for other publicly traded carriers also varied, with Alignment Healthcare once again achieving 100% of its members in 4-plus star plans. The company, which bills itself as a tech-savvy MA provider better attuned to quality and outcomes, sued the CMS early this year to get regulators to hike its scores for 2025.
In comparison, Clover, an insurer and physician enablement company that offers MA plans in several states, dropped below the 4-star threshold for its largest contract, which includes 97% of its members. That could wipe out all of Clover’s current earnings before taxes and other adjustments, Leerink Partners analyst Whit Mayo wrote in a note Thursday.
In a press release Thursday, Clover criticized the CMS’ methodology and said it “does not believe the overall Star rating reflects the excellent health outcomes that it delivers to its members.”
Beyond Clover, there were no major surprises in the results, analysts said. Stock reactions after the stars were published were minimal.
But still, plans that saw their ratings decline will see lower revenues from the CMS, and may elect to cut supplemental benefits or increase premiums to protect their margins, according to TD Cowen analyst Ryan Langston.
That could further shrink the robustness of MA plans in 2027, at a time when major carriers are already cutting back in a bid to resuscitate flagging profits. MA plans historically have been quite lucrative for payers, but margins have shrunk over the past few years as seniors utilize more medical care, healthcare services become more expensive and regulatory changes tamp down on reimbursement.
UnitedHealthcare, Humana and Aetna all reduced the number of states and counties they serve for 2026 to try to recover margins. Large payers are also prioritizing plans with narrower networks and designs passing more costs along to consumers.
Still, there are steps insurers can take to mitigate their impact of stars on their businesses. Humana, for example, has said it plans to pursue “contract diversification” — juggling member enrollment in certain plans and plan attribution to certain contracts — to move members into more highly rated contracts, and secure the higher revenue that entails, for 2027.
