Medicare Advantage star ratings exist to reward insurers for the care their members receive. For 2027, the scores behind billions in bonus money increasingly run through federal court.
The Centers for Medicare & Medicaid Services (CMS) published the 2027 ratings on October 8, 2026, and they will set quality bonus payments for 2028, the agency confirmed.
Seniors will compare plans on those stars during open enrollment from October 15 to December 7 amid rising costs and trimmed benefits.
Clover Health’s PPO plans earned five stars only after CMS removed 20 measures a Georgia judge ruled against, and that decision is on appeal.
Alignment Healthcare, whose biggest contract slipped to 3.5 stars, plans to take CMS to court over the methodology.
Clover’s top rating leaves out 20 disputed measures
With all 20 contested measures counted, Clover’s PPO plans would have scored 4.5 stars, the company disclosed in its October 8 release.
CMS ran the five-star calculation without them after the May 27, 2026, ruling in Clover Insurance Company v. Department of Health & Human Services, which is under appeal, Clover noted.
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Nearly all of Clover’s exposure sits in that one product. About 98% of its more than 157,000 Medicare Advantage members were in PPO plans through the first half of 2026, the release showed.
A five-star rating also gives eligible beneficiaries a special enrollment opportunity to join a qualifying plan outside the usual enrollment periods. If Clover’s rating falls to 4.5 stars on appeal, its PPO plans would lose that five-star enrollment opportunity and the associated top rating status.
“We also continue to support reforms to the Stars program.” — Andrew Toy, CEO, Clover Health, in a company press release
Toy framed those reforms around ratings that more closely follow improvements in members’ health and value for the Medicare program.
A Georgia ruling already forced CMS to rerun 2026 scores
Clover sued CMS in November 2025 after its largest plan fell to 3.5 stars from four, a slide it said cost about $120 million in bonuses, Healthcare Dive reported.
A Georgia federal judge set aside Clover’s 2026 star rating and ordered CMS to recalculate it. The ruling addressed statutory limits on the data CMS could use, while leaving some of Clover’s other legal challenges unresolved.
CMS subsequently recalculated ratings for other insurers using a different approach, removing measures tied to the court’s data-collection ruling while retaining other disputed measures, according to Healthcare Dive.
TD Cowen analyst Molly Turco read the retained measures as a sign the agency intends to keep fighting on the rulemaking question.
CMS said that recalculation had no bearing on its right to appeal. It was the third year the agency had redone payments after insurers won legal challenges, Healthcare Dive added.
Alignment blames triple-weighted measures and heads for court
Alignment’s California HMO contract, H3815, dropped to 3.5 stars from 4.0 and serves about 75% of its health plan members, the company’s 8-K filing showed.
Higher industry cut points and declines in triple-weighted survey and Part D measures drove the slide, Alignment explained.
Two Health Outcomes Survey measures, covering physical and mental health, rose to a weight of three from one for 2027, the CMS fact sheet confirmed.
Alignment also disclosed that CMS retroactively scrapped bonus calculations for its Excellent Health Outcomes for All Index after the performance period ended.
That reversal reduced the payoff from investments Alignment made to meet the agency’s earlier approach, the filing stated.
The insurer plans administrative appeals and expects to commence litigation over measures it believes exceed CMS’s statutory authority.
“We intend to pursue all available administrative remedies.” — Dawn Maroney, president, Alignment Healthcare, in a statement reported by Healthcare Dive
Maroney said the insurer would also litigate the measures and methodologies it believes warrant review.
The bonus damage lands in 2028, not this year
Alignment expects the 2027 ratings to leave fiscal 2026 and 2027 revenue untouched, with the hit falling on fiscal 2028 quality bonus payments, the filing indicated.
Provider risk-sharing deals will offset part of that impact, though the company gave no dollar estimate.
TD Cowen analyst Ryan Langston estimated Alignment could forgo more than $170 million in 2028 revenue, Healthcare Dive reported. The insurer’s shares sank more than 20% after the release, the outlet noted.
Key numbers behind the 2027 star ratings
- Four-star-plus contracts: 37% of MA-PD contracts (188) for 2027, down from 44% for 2026
- Five-star contracts: 15 for 2027, down from 22 for 2026
- Enrollment-weighted average rating: 3.99 for 2027, down from 4.01 for 2026
- Enrollees in four-star-plus contracts: about 71% of MA-PD enrollees for 2027
- Clover PPO rating: five stars without the 20 disputed measures, 4.5 stars with them
- Estimated quality bonus costs: At least $12.7 billion in 2025, based on KFF estimates
Sources: CMS, Clover Health, Healthcare Dive, KFF
Humana’s rebound rides the same rulebook Alignment is fighting
Humana said 95% of its Medicare Advantage members are in plans rated four stars or higher for 2027, its October 9 release showed.
Langston estimated the recovery could add $3 billion or more to Humana’s 2028 revenue, Healthcare Dive reported.
Humana’s shares jumped almost 13% in post-market trading on October 8, 2026, the outlet noted. The weights and cut points that lifted Humana also sank Alignment, so a ruling that rewrites them could move scores sector-wide.
Drug-plan measures softened as well. The average MA-PD score on diabetes medication adherence fell to 2.7 stars from 3.1, the CMS fact sheet showed, while separate research found GLP-1 adherence drops past one key price.
What the court fight signals for Medicare Advantage investors
The 2027 ratings are live on Medicare Plan Finder, yet two of the season’s biggest outcomes remain open legal questions. Clover’s five stars depend on an appeal, and Alignment’s 3.5 stars face a planned lawsuit with no filing date disclosed.
Two dates frame what comes next. Clover reports third-quarter results on November 4, 2026, and open enrollment closes on December 7, 2026.
After that, eligible beneficiaries can use the five-star Special Enrollment Period to enroll in Clover’s qualifying five-star PPO plans, subject to Medicare’s enrollment rules.
