Every October, the federal government grades the private insurers that run Medicare Advantage plans, and investors pay close attention. The scores affect billions of dollars in government bonus payments. They also shape how well each insurer competes for new members in the annual enrollment period. This year's results, published by the Centers for Medicare & Medicaid Services (CMS) on Thursday, October 8, 2026, produced one clear winner.
Overall, the grades slipped. The enrollment-weighted average star rating fell to 3.99 from 4.01 in 2026. Only 188 of 508 rated contracts, or 37%, earned four stars or higher, down from about 44% a year earlier. Fifteen contracts earned the top five-star rating, down from 22. Four stars is the line that matters most for investors, because plans above it qualify for bonus payments and larger rebates. Medicare open enrollment runs from October 15 to December 7, 2026.
Humana (NYSE: HUM)
Humana's turnaround was the biggest story. The company said 95% of its Medicare Advantage members will be in plans rated four stars or higher in 2027, up from 20% in 2026. J.P. Morgan analysts had expected 60% to 70%. Humana said it improved in every measure category. It credited outreach that led more members to complete mammograms, colorectal screenings and diabetic eye exams. TD Cowen analyst Ryan Langston estimated the improvement could bring in $3.00 billion or more in extra revenue in 2028, when payments are adjusted based on the 2027 ratings.
As of midday on Friday, October 9, 2026, HUM traded at $433.50, up 11.98% from the prior close of $387.12. The market cap is $52.05 billion and the P/E ratio is 41.31. The stock has risen 165.77% from its 52-week low of $163.11 and sits 5.04% below its 52-week high of $456.50.
Analysts moved quickly. On October 9, 2026, Baird upgraded the stock to Outperform and raised its target to a Street-high $596.00 from $390.00. Oppenheimer lifted its target to $475.00 from $405.00. Cantor Fitzgerald had already upgraded the stock to Overweight with a $460.00 target on October 7, 2026, the day before the ratings came out. The average target of $487.80 implies about 12.53% upside. The rally has already priced in a lot, though. The stock is far above its low, and the bonus payments won't arrive until 2028.
CVS Health (NYSE: CVS)
CVS, which sells Medicare Advantage plans through its Aetna unit, moved the other way. J.P. Morgan estimated that the share of CVS members in plans rated four stars or higher will fall to roughly 70% from 84%. Healthcare Dive also reported a double-digit percentage drop in CVS enrollees above the four-star threshold.
Reports put the stock down 3% to 5% at points on October 9, 2026. By midday, CVS had recovered to $87.06, down 0.84%. The market cap is $111.08 billion and the P/E ratio is 23.06. The stock is 25.25% above its 52-week low of $69.51 and 21.34% below its 52-week high of $110.68. All four ratings in the latest consensus are bullish, with an average target of $118.75 (about 36.40% upside) and a high of $125.00. None of those targets has been updated since the star ratings came out.
UnitedHealth Group (NYSE: UNH)
UnitedHealth also lost ground. J.P. Morgan estimated its share of members in four-star-or-better plans will fall to about 67% from 81%. There were some bright spots. Three UnitedHealth contracts earned five stars, including one that covers 27 states and Washington, D.C.
The stock rose anyway. UNH traded at $381.18 midday on October 9, 2026, up 2.76%. The market cap is $346.17 billion and the P/E ratio is 24.53. The stock is 48.92% above its 52-week low of $255.97 and 17.43% below its 52-week high of $461.62. TD Cowen's Langston cut his target to $402.00 from $430.00 on October 9, 2026, and kept a Hold rating. Morgan Stanley has the high target at $529.00, and the average of $476.20 implies about 24.93% upside.
The ratings also hit smaller insurers. Alignment Healthcare's largest contract dropped below four stars, and its stock fell more than 20%.
What to Watch
UnitedHealth reports third-quarter results before the market opens on Tuesday, October 13, 2026. It will be the first big insurer to report since the ratings came out. Investors will listen for comments on medical cost trends, 2027 Medicare Advantage pricing and how the lower ratings affect future payments.
Open enrollment starts two days later, on October 15, 2026. Over the following weeks, investors will see whether Humana's higher ratings help it win members from competitors. Humana and CVS report earnings later in the season.
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