On Monday, Humana (HUM.N) filed a new lawsuit challenging the U.S. government’s decision to lower the health insurer’s star ratings for its government-backed Medicare plans, following the dismissal of an earlier challenge on technical grounds.
In its lawsuit filed in federal court in Fort Worth, Texas, Humana argues that the downgraded ratings could lead to a loss of customers and potentially cost the company billions of dollars in government bonus payments—funds that would have otherwise been used to lower premiums and enhance benefits for its members.
Last week, U.S. District Judge Reed O’Connor in Fort Worth dismissed the claims, ruling that Humana had not fully pursued all available out-of-court remedies before filing the lawsuit.
In the new lawsuit, Humana states that it has recently completed the administrative appeals process, thereby establishing the insurer’s standing to proceed with the lawsuit.
"A final Star Rating determines legal rights and obligations, and legal consequences flow from them," the company said.
The U.S. Department of Health and Human Services, responsible for overseeing Medicare, did not immediately respond to requests for comment.
Humana is among the largest providers of Medicare Advantage plans in the U.S.—private insurer-administered programs funded by Medicare to offer health coverage for seniors and certain disabled individuals.
The U.S. Centers for Medicare and Medicaid Services (CMS), a division of HHS, assigns star ratings ranging from one to five to these plans to assist beneficiaries in making informed choices.
Plans with higher star ratings earn increased government payments when they maintain costs below specified targets. These bonus payments can amount to hundreds of millions or even billions of dollars.
Humana initially filed a lawsuit against HHS in October following the finalization of the 2025 star ratings by CMS. Similar to the complaint dismissed by Judge O’Connor, Monday’s lawsuit contests the methodology used to calculate the ratings and requests a court order compelling CMS to annul Humana’s 2025 ratings and recalculate them.
