On Friday, Oct. 9, Humana (HUM) jumped 12% in one day. The trigger was a grade. The U.S. government improved the rating on its Medicare Advantage plans. Higher stars mean bigger bonus payments from Medicare. Investors did the math fast.
Those are the same stars printed next to every Medicare Advantage plan in the booklet on your kitchen table. As a general matter, Medicare's scale runs from one star to five. It grades things like customer service, care for chronic conditions and member complaints. A plan's score changes what the insurer gets paid. It also says something about how the plan treats the people in it. Humana gave part of the jump back by Tuesday, Oct. 13, closing at $420.38, down $13.12 on the day, by the Wednesday paper's table. The stock isn't the point. The rating is.
The biggest insurer is getting smaller
UnitedHealth (UNH) reported on Tuesday, Oct. 13. Profit beat. Adjusted earnings came in at $4.69 a share against the $4.14 analysts expected, and the company raised its full-year floor to at least $20.50. Anna Wilde Mathews of the Journal lays out how it got there. CEO Stephen Hemsley came back more than a year ago after a meltdown that erased hundreds of billions in value. He's been cutting what doesn't pay. That means a smaller physician group and, in the paper's words, "shrinking its Medicare plans." Total insured members fell to 48.3 million from 50.1 million a year earlier.
Its medical-loss ratio was 88.4%, better than the 89.7% forecast. That's the share of premium dollars paid out for care. For a shareholder, lower is better. For a member, it can mean a tighter network, more approvals to chase, or a plan that quietly leaves your county. The paper doesn't say which plans or where. That's exactly why you check.
Our read
This is Health Costs, and it's seasonal. Medicare's fall sign-up window runs each year from Oct. 15 to Dec. 7, so it's open now. Every year some plans vanish, some change their drug lists, and some lose a star or two. We wrote last week that drug-plan choices are already shrinking for 2027. Now the biggest U.S. health insurer says out loud that it's shrinking its Medicare plans too. UnitedHealth is held at weight in 9 books; nothing added. Humana isn't held. Neither fact matters for your coverage. The star rating and the network do.
Here's the one check this week. Find the Annual Notice of Change your plan mailed you in September. Its first pages say whether your plan continues, what the premium does, and what moves on the drug list. Then look up the plan's star rating on Medicare's plan finder and compare it with last year's. If the stars dropped, your doctor left the network, or your county is gone from the map, you have until Dec. 7 to move. If the notice raises a question you can't answer, bring it to a review. You don't wait for a January denial letter to read the notice that came in September.