Humana, Alignment sold off on star rating confusion, says Barclays

Barclays says Humana (HUM) and Alignment Healthcare (ALHC) traded down yesterday amid Medicare Advantage star rating confusion. The selloffs were due to due to concerns around 2025 star ratings impacting 2026 plan revenue, driven by what could have been a potential technical glitch on the Medicare Plan Finder website, the analyst tells investors in a research note. When the Medicare Advantage Plan Finder website goes live, it displays the latest star rating for each plan. Because 2025 stars have not been released by the Centers for Medicare and Medicaid Services, the website shows “Star rating: Coming Soon” for this year’s plans, says Barclays. Filtering plans by stars indicates Humana’s largest contract H5216 and Alignment’s H3815 contract no longer hold four star ratings, whereas CVS Health’s (CVS) two large contracts H5521 and H5522 remain above four stars, the firm points out. Following Tuesday’s close, it remains unclear whether the Plan Finder website is a reliable indicator of stars, according to Barclays. The firm’s analysis of the 650 plan documents released for CVS signals the company is well positioned for margin improvement.