Medicare Star Ratings Affecting Insurance Giants Stock Price
- CMS updated its star quality ratings for 2018 policy year on Wednesday in which some health insurance giants received lower scores for certain measures.Â
- Humana attributedÂ the decrease in the percentage of its Medicare membership in 4- or 5-star plans (from 78% [2.15 million members]Â a year ago to 37% [1.17 million members]on July 31)Â to its lower scores.
- The payer’s common stock shares fell drastically yesterday. Humana’s stock opened at $178 per share on Wednesday but fell to $168.44 at the close of business. The stock opened at $168.02 on Thursday.
Humana argued the star results “do not accurately reflect the companyâs actual performance under the applicable Star measures.” It also said the decline in its membership in higher rate plans “does not take into account certain operational actions the company intends to take over the coming quarters to mitigate any potential negative impact of these published ratings on Star bonus revenues for 2018.”
Humana is facing significant blows to its membership and finance. Meanwhile,Â Aetna âÂ with whom Humana has a pending mergerÂ âÂ said the percentage of its Medicare member enrolled in 4-star plans or higher went up 4 percentage points from last year to 91%. The companies’ merger is facing a lawsuit brought by the DOJ.
Another health insurance company that has a pending merger being challenged by the DOJ,Â Cigna,Â also indicated it received some lower star quality ratings on its Medicare plans, according to the The Wall Street Journal. The founder and president of its arm for Medicare Advantage plans Cigna-HealthSpring, Herb Fritch,Â announced earlier this week he will be retiring in November. Cigna has already been dealing with hits to its Medicare business as it still in the process of resolving Medicare sanctions imposed by CMS. Cigna’s stock fell from $125.54 per share to $121.96 by close of business. Cigna’s common shares opened on Thursday at $121.57.
The CMS Blog: Improved quality of Medicare health and drug plans means great news for Medicare beneficiaries
Humana: Humana Comments on Medicare Star Quality Ratings and Raises 2016 Financial Guidance
The Wall Street Journal : Humana Sees Potential Fallout From Lower Medicare Star-Rating Report