Investing.com -- Managed care insurers face divergent earnings impacts from the Centers for Medicare and Medicaid Services' 2027 Star Ratings, with Humana positioned for significant upside while UnitedHealth confronts the largest headwind, according to an Evercore note to clients from analyst Elizabeth Anderson following the CMS release.
The Star Ratings determine quality bonus payments that insurers receive for their Medicare Advantage plans, directly affecting profitability. The latest ratings show material shifts in contract performance across the sector's largest players.
1. Humana Inc (NYSE:HUM) - HUM's recovery is supported by improvement across multiple contracts, including the all-important H5216, which gained 4 stars on 13 contracts and lost 1. Drug-plan quality-improvement ratings rose on all 12 upgraded contracts, health-plan quality-improvement ratings rose on 10, and readmission improved on 9. H5216 also saw both its Part C and Part D summary ratings reaching 4. The breadth of improvements reflects the importance management has placed on fixing this metric over the past year. HUM has the most potential earnings per share upside, as the company should receive approximat...