Clover gains, Humana dips as Medicare finalizes 2025 Star Ratings

Clover Health (NASDAQ:CLOV) was a notable gainer, and Humana (NYSE:HUM) extended its recent selloff in the premarket on Friday as the Centers for Medicare & Medicaid Services (CMS) announced highly anticipated Star Ratings for 2025 Medicare health and prescription drug plans.

In a press release late Thursday, CMS said that only 40% of MA prescription drug plans earned a score of four stars or higher for 2025, making it the third consecutive year the percentage of top-rated MA plans dropped.

Medicare Star Ratings can define MA insurers’ financial outlook as plans with four or more stars are eligible to receive annual bonus payments in the subsequent year.

Last week, Humana (HUM), the second-biggest player in the Medicare Advantage market, said that the number of members enrolled in its top-rated MA plans for 2025 dropped sharply from a year ago. The announcement, made before Medicare finalized ratings, sent its stock toward a 52-week low.

Meanwhile, Clover Health (CLOV) said that CMS has increased the Star rating of its PPO MA plans to four stars and the HMO MA plan to 3.5 stars for 2025. The Franklin, Tennessee-based company added that its PPO plans cover over 95% of its Medicare Advantage membership.

CVS (CVS), another leading player in the MA market, said that 88% of its MA members are in 2025 Medicare Advantage Prescription Drug (MAPD) plans rated four stars or higher. The company added that more than 68% of MA members served by its Aetna insurance unit are in a 4.5-star plan for 2025.

Centene (CNC), which mainly focuses on Medicaid, noted that nearly 46% of MA members are enrolled in plans rated 3.5 stars or higher compared to ~23% in the prior year. Despite higher-than-anticipated cut point changes, it was a meaningful outcome that met the company’s internal expectations, CNC said.

Centene (CNC) added that it is appealing its TTY results that CMS used in the calculation.

Medicare’s Star Ratings system was the subject of a string of recent lawsuits. UnitedHealth’s (UNH) insurance arm, UnitedHealthcare, was the latest to legally challenge the assessment last week following similar lawsuits that ended in favor of Scan Health Plan and Elevance (ELV) during the summer.