CMS's final 2027 Medicare Advantage Star Ratings are expected in early October, closing a preview cycle in which roughly half of draft cutpoints moved harder. Humana has already made its bet: exiting plans covering approximately 600,000 members, concentrated in its 3.5-star-and-below book, while cutting GAAP EPS guidance to at least $6.52 and holding adjusted EPS guidance at at least $9.00.
Approximately 600,000. That is the member count Humana has attached to the Medicare Advantage plans it is exiting for 2027, and it is the number to hold in your head as CMS's final 2027 Star Ratings post in early October. The exits are not evenly distributed across Humana's book. CFO Celeste Mellet told analysts on the company's July 29, 2026 second-quarter earnings call that "the majority of the plan exits were in plans with 3.5 or lower ratings for BY '27," a direct, sourced tie between the rating floor and the membership Humana is walking away from.
Set the denominator before you do anything else with that 600,000 figure. Humana reported total Medicare Advantage membership of 7,180.9 thousand as of June 30, 2026 -- 6,453.7 thousand individual MA plus 727.2 thousand group MA, per the company's second-quarter 2026 earnings release. Using Humana's June 30, 2026 MA membership base of 7.18 million, the approximately 600,000 exits equal about 8.4% of its MA enrollment. That is a calculated figure, not a disclosed one, and the math only holds if you use the same membership snapshot Humana used when it built the guidance.
Final 2027 Star Ratings are expected to post in early October, closing out a preview cycle that already told plans most of what they needed to know. Draft cutpoints for the 2027 Star Ratings, which will be published in October 2026 and set quality-bonus-payment eligibility for 2028, are not public, but analysis from the Newton Smith Group, as reviewed by Healthcare Dive, found that roughly half of cutpoints moved harder relative to the prior cycle, about a third held steady, and the remainder eased. The tightening concentrated in HEDIS measures rather than CAHPS: Newton Smith Group's analysis reportedly flagged Kidney Health Evaluation for Patients with Diabetes rising 7 to 10 points and Colorectal Cancer Screening tightening 4 to 11 points, per Healthcare Dive's reporting. None of this is confirmed final data -- it is a preview read on a preview cutpoint set -- but it is the environment plans were bidding into when they built 2027 network and product footprints, and it is the context against which Humana's exit decision should be read.
Get the mechanics right here, because they matter for how much margin these exits are actually worth. A contract rated 4.0 stars or higher generally qualifies for the Medicare Advantage quality bonus payment, which raises its benchmark. A contract at 3.5 stars loses that bonus eligibility and the associated benchmark increase, but it does not lose rebates outright. If it bids below its benchmark, a 3.5-star contract can still earn rebate dollars. The difference is not that 4.0 earns a higher rebate percentage than 3.5 -- both are generally in the 65% rebate tier. It is that the 4.0-star contract calculates its bid-to-benchmark spread against a bonus-adjusted benchmark. The exits Humana is making are best read as a bet that the bonus-eligible margin on a 4-plus-star book is worth more than trying to run a 3.5-star book against a lower, un-bonused benchmark.
Humana's own July 29, 2026 earnings release confirms the guidance mechanics directly. Full-year 2026 GAAP diluted EPS guidance was revised to at least $6.52, down from the prior at-least-$8.36 figure the company had guided to as of its first-quarter release. Full-year adjusted EPS guidance was affirmed at at least $9.00. The Q2 release revised GAAP EPS guidance while affirming adjusted EPS. Humana attributed the GAAP revision to specific items excluded from adjusted earnings, including impairment charges. Separately, the company has described Star Ratings as a meaningful headwind to its MA economics. The release should be read for the exact reconciliation rather than treating the $2.48 difference as a pure Star Ratings effect.
Humana's renewed 2025 Star Ratings challenge was dismissed with prejudice by the Northern District of Texas in October 2025. Humana filed a notice of appeal to the Fifth Circuit in November 2025. The litigation remains separate from the upcoming 2027 Star Ratings release.
Humana management has said its 2027 bids are designed to support progress toward a sustainable pre-tax margin of at least 3% in 2028.
Humana has not described the 600,000-member figure as an automatic permanent membership loss. The extent to which members select another Humana option during annual enrollment will be a key 2027 retention measure.
The number that matters in early October is not whether Humana's remaining book holds 4 stars -- it is whether the final cutpoints landed as harshly as the Newton Smith Group preview suggested. Watch specifically for how many of Humana's post-exit contracts land at exactly 4.0 stars, the threshold where quality-bonus eligibility flips on. A cluster of contracts sitting right at that line, rather than comfortably above it, would suggest this exit round buys Humana one cycle of relief rather than a durable fix -- and would put the 2028 margin target back in question before the ink on this year's bid strategy is even dry. Final ratings will show whether the remaining Humana contracts landed where the company's quality-improvement and product-rationalization strategy anticipated. They will not, by themselves, validate or invalidate the full exit strategy. Watch, too, whether peer plans with membership concentrated in the same 3.5-star tier disclose comparable exit or retrenchment decisions once the final ratings are in hand; a single-company data point reads very differently than an industry pattern.
This is analysis, not investment advice. Continuum does not make recommendations to buy or sell securities.
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