Clover Health Stock Pops: What's Happening?

Clover Health Investments Corp (NASDAQ:CLOV) shares are jumping Friday. The Centers for Medicare & Medicaid Services awarded the company’s Medicare Advantage plans high 2027 Star ratings. Clover Health Investments shares are climbing with conviction. What’s driving CLOV stock higher? Clover Health Rises After CMS Awards its PPO Plans 5 Stars CMS rated Clover’s Medicare Advantage PPO plans at 5 Stars and its HMO plan at 4.5 Stars for 2027, the company announced after Thursday’s close. Clover runs two Medicare Advantage contracts. H5141 holds the 5-Star rating, and H8010 holds 4.5 Stars. Both qualify for quality bonus payments. CMS data shows only 15 Medicare Advantage contracts with 5 Stars, and H5141 is one of them. The ratings shape payments in 2028. Clover’s Medicare Advantage enrollment rose about 48% from a year earlier through the first half of 2026, topping 157,000 members. Roughly 98% of them belong to its wide-network PPO plans. A 5-Star rating also lets those PPO plans take new enrollees all year. CMS scores Medicare Advantage and Part D contracts every year on a 1-to-5 Star scale that measures healthcare quality and drug plan performance. Plans rated 4 Stars or higher can earn financial bonuses, depending on the plan, though standalone Part D drug plans do not qualify. Clover said gains across the Stars domains lifted its overall rating. Few big insurers reach that level across the board. Only 11 of CVS Health’s 39 rated contracts, the group that includes Aetna Medicare, hit 4 Stars. Humana placed 18 of 30 at that level, UnitedHealth 16 of 54, Elevance 8 of 37 and Centene 3 of 46. Among all 508 rated Medicare Advantage contracts, 37% earned at least 4 Stars. A Court Ruling Lifted Clover’s PPO Rating to 5 Stars A May 27 decision in Clover Insurance Company v. Department of Health & Human Services changed how CMS scored the PPO plans. That decision is on appeal. CMS dropped the 20 measures at issue in the ruling when it calculated the PPO rating, producing 5 Stars. Counting those measures, the PPO plans would have earned 4.5 Stars. Clover also kept its lead on core HEDIS quality measures for a third straight year, scoring 4.82 out of 5 Stars. That ranks first among non-SNP PPO plans with more than 2,000 members. HEDIS tracks care quality, such as preventive screenings and the management of diabetes, cancer and heart disease. Clover credits a care model built on Counterpart Assistant, which gives physicians the information they need to spot care gaps and make better-informed decisions. Clover Executives Say the Higher Rating Lets Them Reinvest in Benefits Clover Health CEO Andrew Toy said strong Star ratings strengthen the company’s ability to serve members and deliver market-leading plans. Toy added that Clover continues to back reforms that link the ratings more closely to real gains in members’ health and to value for Medicare. Jamie Reynoso, CEO of Medicare Advantage at Clover Health, said the higher rating lets the company “reinvest in even more competitive benefits.” Reynoso said the milestone also allows Clover to serve more Medicare members without weakening its finances or care quality. CLOV Shares Are Climbing CLOV Price Action: Clover shares were up 6.33% at $4.868 at the time of publication on Friday, according to Benzinga Pro. Read Also: CVS Health's Aetna Says Strong Medicare Star Ratings Boost Confidence in Return to Appropriate Margins Image: Dennis Diatel/Shutterstock