Health insurer Centene Corporation and 35 of its subsidiaries filed a federal lawsuit on October 22, 2026, against the U.S. Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS), challenging the quality scores assigned to its senior health plans. Filed in the U.S. District Court for the Southern District of Georgia, the complaint alleges that federal regulators used 17 unlawful measures to calculate Centene's 2027 Medicare Advantage Star Ratings. According to Insurance Business, the company estimates the disputed grades will cost it approximately $448 million in lost bonus payments and rebates for the 2028 bonus year.

The legal challenge arrives during the annual Medicare open enrollment period, which began on October 15 and runs through December 7, 2026. While Centene fights to overturn its scores in court, rival insurer Humana is experiencing a major rebound within the exact same rating cycle, reporting that 95% of its Medicare Advantage members are now enrolled in plans rated four stars or higher for 2027, according to Modern Healthcare.

The Core of Centene's Legal Challenge

Centene's Medicare Advantage plans currently cover about 910,000 members nationwide, according to STLtoday.com. In the newly released 2027 ratings published on October 8, 2026, Centene's plans received mostly 3-star or 3.5-star grades, with only three plans reaching the four-star threshold, Hoodline reported.

In its complaint, Centene argues that CMS lacked the legal authority to rely on 17 specific quality measures covering areas such as blood pressure control, flu shots, customer service, and medication adherence. The insurer contends that the federal government released its scoring methodology through a technical document rather than putting the rules through a formal public notice-and-comment rulemaking process. According to Modern Healthcare, Centene is the third insurer to file a legal challenge against the 2027 Star Ratings, following a similar rulemaking argument raised by Alignment Healthcare.

Centene's lawsuit leans heavily on a May 2026 precedent from the same Georgia federal court. In that earlier case, Clover Insurance Co. v. HHS, the court ruled that 20 measures CMS used to calculate Clover's 2026 Star Ratings were unlawful because they either relied on data sources Congress never authorized for rating purposes or bypassed formal rulemaking. Although CMS appealed the Clover decision to the Eleventh Circuit, the agency complied with the court's order to recalculate Clover's 2026 scores and voluntarily excluded those same disputed measures from Clover's 2027 ratings.

Centene is asking the court to apply that same standard to its contracts across states ranging from California and Iowa to Georgia and New York. The company asserts that if the 17 disputed measures are removed, scores for 34 of its plans would improve and 18 plans would reach four stars or higher, according to St. Louis Business Journal. Those improved figures represent Centene's own estimates rather than CMS-approved recalculations. The insurer previously challenged its ratings in 2025, which led CMS to recalculate and raise scores for seven Centene plans.

Why Star Ratings Matter for Older Adults

CMS uses the one-to-five-star scale to help Medicare beneficiaries compare the quality of private health plans on the federal Medicare Plan Finder website. Behind the scenes, these scores dictate how much federal funding an insurer receives. Plans that achieve four stars or higher qualify for federal quality bonus payments and keep a larger share of the rebates they generate.

Health insurers are required to direct those rebate funds back into their plans, typically using the money to lower monthly premiums, reduce out-of-pocket costs, or fund supplemental benefits such as dental, vision, and hearing coverage. When an insurer misses the four-star mark, it has fewer financial resources to make its plans attractive to older adults shopping for coverage.

Falling below three stars carries even stricter regulatory penalties. Plans scoring below that threshold receive a public warning icon on the Medicare Plan Finder website, which often discourages brokers and seniors from enrolling. If a contract remains below three stars for three consecutive years, CMS has the authority to terminate the contract entirely. Centene alleges that two of its specific contracts received low-performing warning labels that would have cleared the three-star threshold if the 17 disputed measures had been omitted. The company is asking the court to strip those warning labels and allow it to submit revised plan bids for 2028.

Humana Rebounds in the 2027 Rating Cycle

The financial mechanics of the Star Ratings system are creating a sharp divide among major healthcare payers this fall. While Centene seeks relief in federal court, Humana announced a substantial recovery in its 2027 quality scores. According to Yahoo Finance, Humana reported that 95% of its Medicare Advantage members are now enrolled in plans rated at least four stars for the 2027 cycle.

In a regulatory filing reported by MarketWatch, Humana stated that it exceeded its internal goal of reaching top-quartile Stars revenue per member per month, which the company defines as 10% above the median of a peer group that includes Centene, CVS, Elevance, HCSC, and United. Humana cautioned that its actual 2028 financial results will still depend on future membership numbers, contract mix, risk scores, federal benchmarks, and rebates. Even with those caveats, the high ratings position Humana to capture significant federal bonus payments for the 2028 plan year, potentially widening the competitive gap between top-scoring insurers and those fighting lower grades.

Frequently Asked Questions

How do the 2027 Star Ratings affect seniors during the current open enrollment period?

The 2027 Star Ratings were published on October 8, 2026, just ahead of the Medicare open enrollment window running from October 15 through December 7, 2026. Seniors can view these one-to-five-star quality scores right now on the Medicare Plan Finder website as they compare coverage options for the upcoming year. While the ratings are visible immediately to guide consumer choices, the financial bonus payments and rebates tied to the 2027 scores actually take effect in the 2028 bonus year.

Will the Georgia court's earlier ruling automatically apply to Centene's lawsuit?

Not automatically. While Centene filed its complaint in the same Southern District of Georgia court that invalidated 20 rating measures in the May 2026 Clover Insurance case, CMS has appealed the Clover decision to the Eleventh Circuit. Centene's claims regarding the 17 measures and the estimated $448 million revenue loss remain allegations that the court must review and decide independently.

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