Humana Inc. told investors in July that Medicare Advantage contracts it plans to drop for 2027 cover roughly 600,000 members, the latest round in a retrenchment that has already cost the insurer half a million members once before. Chief Financial Officer Celeste Mellet said on the company’s July 29 second-quarter earnings call that Humana expects to recapture a share of that group into its other plans, at a rate similar to the slightly more than 40 percent it kept after the 2025 round of exits. Carry that rate forward and close to 360,000 people are left to find another insurer or default to Original Medicare — a number Humana has never stated outright, because the company discloses only the two figures that produce it.
The Arithmetic Behind a Number Humana Never Published
Humana’s own disclosures stop at two data points: the roughly 600,000 members whose Medicare Advantage plans will not continue into 2027, and a stated intention to recapture a significant portion of that volume at close to the rate the company achieved after its 2025 exits, when it kept just over 40 percent of the affected members inside other Humana plans. Neither number is a forecast of where the rest of the group lands; the estimate near 360,000 is simply the remainder once the retention assumption is subtracted from the total, and Humana has not said how many of those people enroll with a competing insurer rather than falling back to Original Medicare with no other coverage arranged.
That retention assumption came directly from Mellet, who told analysts Humana intends to recapture a significant portion of the 2027 volume at a pace matching the company’s 2025 experience, a comparison reported directly from that earnings call. It is a projection built on one prior year’s pattern, not a count of anyone’s actual enrollment decision, and nothing requires the 2027 recapture rate to land anywhere near the 2025 figure it is modeled on.
The estimate also moves with a retention rate that is itself an extrapolation from a smaller base. Humana shed roughly 500,000 members in 2025 while exiting unprofitable plans and counties, narrowing its 2026 footprint to 46 states and 85 percent of U.S. counties, down from 89 percent the year before — the same contraction that produced the 40 percent recapture figure now being applied to a group nearly a fifth larger. Humana’s individual Medicare Advantage membership still grew by approximately 25 percent in 2026, according to its own second-quarter earnings release, a trend that could push 2027 retention above 40 percent and shrink the residual, or fall short of it and push the number of displaced members higher.
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A Court Loss Over Star Ratings Sits Behind the Cuts
Mellet described the 2027 exits as trimming “the lower tail of profitability and return” rather than cutting benefits evenly across Humana’s map, and the majority of the discontinued plans carry a rating of 3.5 stars or lower for the 2027 bonus year — though she told analysts star ratings were not the primary factor in choosing which plans to drop. About 20 percent of Humana’s members sit in plans rated 4 stars or higher for 2026, a group this round of exits does not touch.
A detail buried in Humana’s own securities filings adds weight to that framing. The company sued to overturn its 2025 Star Ratings, a federal court rejected the challenge on October 14, 2025, and Humana has appealed while warning in its quarterly securities filing that an unsuccessful appeal would keep cutting into the quality bonus payments CMS ties to those ratings. Star Ratings determine how much bonus and rebate money an insurer can put back into a plan’s benefits, so a contract stuck at 3.5 stars generates less of that revenue to offset medical costs than a 4-star contract covering a similar population.
None of this reads as Humana retreating from Medicare Advantage broadly. The company added more than a million MA members for 2026 coverage and was the only major national insurer to grow enrollment during that annual enrollment period, while UnitedHealthcare’s Medicare Advantage membership fell roughly 9 percent and Elevance Health’s fell 14 percent over the same stretch. The 2027 exits look less like a pullback from the business than a reallocation away from the specific contracts a lost court fight just made more expensive to keep profitable.
The Federal Clock Attached to Every Dropped Contract
Whatever the final count of displaced members turns out to be, each of them is entitled to the same procedural protection once Humana’s non-renewal decisions are finalized. Federal regulation requires the notice explaining a plan’s exit to be dated no later than October 2 for any contract ending December 31, a fixed date CMS set specifically to keep Medigap guaranteed-issue rights consistent across every affected enrollee rather than tied to when a given plan happens to mail its letter.
That notice has to state plainly what happens if a member does nothing: automatic enrollment in Original Medicare, which carries no built-in drug coverage and no annual cap on out-of-pocket costs. That default is precisely the outcome Humana’s 40 percent retention assumption implicitly leaves for everyone else — either another insurer picks up the member, or the federal fallback does, and Humana’s own arithmetic does not distinguish between the two.
What the company has disclosed is a projection built on one prior year’s behavior, applied to a group nearly a fifth larger than the one it measured that pattern against. The 600,000-member figure is fixed; the 40 percent recapture rate is not, and until CMS finalizes which contracts actually end this cycle, the number of people who genuinely have to shop for new coverage on their own will keep moving around the estimate Humana’s own numbers point to today.
Rebuilding Coverage After an Insurer Leaves the County
The non-renewal notice a dropped member receives explains that a plan is ending and states the default outcome if nothing is done, but it does not weigh that default against what a specific replacement plan would actually cost against current premiums, drugs and doctors. Humana’s own disclosures stop at a national retention estimate, not a household-level comparison, and the federal notice does not rank alternatives against a person’s own prescription list or physician network.
The 2027 Medicare Open Enrollment Decision Kit pairs a cost calculator spreadsheet that compares plans on cost, drugs and doctors with a provider call script for confirming a doctor’s network status before switching, inside a 42-page decision kit.
See the cost calculator and provider call script in The 2027 Medicare Open Enrollment Decision Kit.
This article was researched and drafted with the assistance of AI and reviewed by The Money Overview editorial team.
