The Medicare Advantage plans Humana is exiting for the 2027 plan year are concentrated among its lower-performing options: most carry a quality rating of 3.5 stars or below, according to a trade-press review of the same investor materials Humana used to disclose the roughly 600,000-member exit. Star ratings are the federal government’s own scorecard for Medicare Advantage plans, and a low score does more than affect a plan’s reputation. It shapes how much extra money the plan receives from Medicare each year, and increasingly, whether the plan continues to exist at all. The pattern is easy to miss because Humana disclosed it to investors, not to the members whose plans are actually on the list.
The 1-to-5 Star Scorecard Behind the Exits
Every Medicare Advantage and Part D contract gets rated by the Centers for Medicare & Medicaid Services on a 1-to-5 star scale, similar in concept to a rating a shopper might see attached to a hotel or a restaurant, except that CMS sets its own thresholds, called cut points, for dozens of measures before assigning a final score. The agency’s own star ratings fact sheet says plans that combine Medicare Advantage with a drug benefit are scored on as many as 43 separate measures covering clinical care, medication management and member experience, then rolled into the single number that appears on Medicare’s plan-comparison tools.
Humana’s own Q2 2026 earnings call transcript confirms the company expects the 2027 exits to affect approximately 600,000 members and to recapture a share similar to 2025’s rate, which Chief Financial Officer Celeste Mellet told analysts was “just over 40%.” The transcript itself does not break down the star ratings of the specific plans being dropped.
What the star rating itself doesn’t show: A plan’s rating explains how Medicare scored it last year, not whether the specific doctors, drugs and total costs that matter to one household would score better with a different insurer, the side-by-side check built into The 2027 Medicare Open Enrollment Decision Kit.
Why 3.5 Stars or Lower Matters for 2027
The star detail comes from Becker’s Payer’s review of the same investor materials, which reported that the majority of the plans Humana is exiting for 2027 carry a rating of 3.5 stars or lower. CMS’s own fact sheet on the ratings explains why the timing lines up: the scores a plan earned in the 2026 cycle “will impact 2027 MA quality bonus payments,” the extra money Medicare pays higher-scoring plans on top of their base rate. A plan sitting at 3.5 stars or below heading into 2027 is a plan collecting a smaller bonus, if any, than one rated higher.
That bonus formula is the kind of detail that shows up in a company’s internal math long before any member notices a change. A plan can keep loyal enrollees and still lose money for the insurer once a lower star score shrinks the bonus payment underneath it, which is one reason a rating-driven exit can look, from the outside, like it came out of nowhere.
The Margin Target Tied to the Ratings
Humana has linked its 2027 bidding strategy to a companywide financial goal. President and CEO James Rechtin told the same earnings call the approach was meant to keep Humana on track for “a sustainable margin of at least 3%” by 2028, a target that makes a plan’s star-driven bonus payment, not just its enrollment count, part of the decision to keep it or drop it.
Federal payments add pressure of their own. CMS finalized a 2.48 percent average increase in what it pays Medicare Advantage plans for 2027, according to the agency’s own rate announcement, a modest bump insurers have said does not fully offset rising medical costs, particularly for plans also losing quality-bonus dollars to a lower star score.
What the Rating Actually Measures
A 3.5-star plan is not automatically a plan that failed to deliver care. CMS’s fact sheet lists the underlying categories as clinical outcomes, how well a plan manages chronic conditions and medications, and member-experience measures drawn from surveys, and a plan can score lower on any single measure without an individual member ever personally experiencing a problem. What the rating reliably signals is how a plan compares with others under Medicare’s own methodology, the same methodology that sets the size of its federal bonus. A household comparing two plans side by side, one Humana is dropping and one it is keeping, is really comparing two different scores on that same 43-measure checklist, not two different verdicts on whether either plan is safe to use.
The 600,000 Members and What Comes Next
For the members themselves, a plan’s star rating rarely shows up anywhere they would see it day to day; it lives on Medicare’s plan-comparison tools rather than on a monthly statement. What they will see instead is the same kind of notice every displaced Medicare Advantage member gets when a plan is discontinued, arriving ahead of the fall enrollment period without necessarily explaining that a rating was part of the decision.
As CMS’s own fact sheet puts it, describing how the current cycle works, “the 2026 Star Ratings appear on Medicare Plan Finder for 2026 Open Enrollment and will impact 2027 MA quality bonus payments,” the same bonus math sitting behind Humana’s decision to exit the plans it named for 2027.
The Rating Question a Notice Won’t Answer
A plan losing points on Medicare’s own scorecard is not the same as a plan that stopped fitting a particular member’s prescriptions or preferred doctors, and none of the roughly 600,000 members involved in the 2027 exits will see their own plan’s exact rating explained in the notice that ends it.
The 2027 Medicare Open Enrollment Decision Kit walks through reading the Annual Notice of Change and comparing the total year under three medical-cost scenarios, so a lower rating on paper does not stand in for an actual side-by-side look at what replaces it.
See how a replacement plan’s rating and coverage compare in The 2027 Medicare Open Enrollment Decision Kit.
This article was produced with AI assistance and reviewed by a human editor, drawing on Humana’s own earnings transcript and CMS’s Star Ratings documentation.
