Is Humana's (HUM) Medicare Star Ratings Surge Shaping Its Long-Term Growth Strategy?

• Humana recently provided an update on its preliminary 2026 Medicare Advantage Star Ratings, revealing a significant increase in the percentage of members enrolled in 4.5-star plans, and reaffirmed its 2025 earnings guidance despite industry challenges and reimbursement pressures.
• This development signals operational resilience, as the company reports its ratings are aligned with internal expectations and highlights a proactive approach to maintaining financial and service quality stability in a rapidly evolving healthcare landscape.
• We'll examine how the surge in higher-rated Medicare Advantage plan enrollment influences Humana's investment narrative and future growth outlook.

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Humana Investment Narrative Recap

To be a Humana shareholder, you need confidence in Medicare Advantage growth, strong operational execution, and effective risk management amid reimbursement uncertainty. The latest antitrust litigation naming Humana does not appear to immediately alter near-term catalysts, such as stabilizing Stars ratings or member growth, but it introduces a headline risk investors should monitor alongside ongoing concerns about reimbursement rates and regulatory change. For now, the short-term focus remains on managing medical cost ratios and executing Stars improvement initiatives.

Among Humana’s recent announcements, the partnership expansion with TailorCare stands out, offering Medicare Advantage members in Dallas and Denver advanced musculoskeletal care and home-based physical therapy programs. This aligns with efforts to improve member engagement and care quality through value-based models, key factors supporting operational outcomes and the short-term earnings outlook as the company faces evolving legal and reimbursement headwinds.

By contrast, investors should be mindful of how this lawsuit highlights the risk of regulatory and legal actions potentially affecting reimbursement rates and ...

Read the full narrative on Humana (it's free!)

Humana's narrative projects $150.9 billion in revenue and $3.3 billion in earnings by 2028. This requires 7.0% yearly revenue growth and a $1.7 billion increase in earnings from the current $1.6 billion.

Uncover how Humana's forecasts yield a $298.95 fair value, a 16% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community submitted 11 fair value estimates for Humana, ranging from US$211.89 to US$1,204.45 per share. As members weigh legal headwinds and shifts in reimbursement, viewpoints on Humana’s outlook remain divided, explore these varied perspectives to inform your own view.

Explore 11 other fair value estimates on Humana - why the stock might be worth over 4x more than the current price!

Build Your Own Humana Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Humana research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Humana research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Humana's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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