The shares of Clover Health Investments Corp. (NASDAQ: CLOV) were up 8.00% to $1.35 in the pre-market session as of the most recent check, indicating that the company is maintaining its upward trajectory. This follows a notable surge in the previous session, when CLOV shares saw a 21.36% rise and ended at $1.25. This momentum is the result of a notable recent occurrence.
CMS Modifies The Star Ratings For Clover Health
The Centers for Medicare and Medicaid Services (CMS) have modified the 2024 Star Ratings for Clover Health’s PPO Medicare Advantage (MA) plans for the 2025 payment year. The rating was upgraded from 3 to 3.5 stars by the CMS, an increase of 0.5 stars. Presently, PPO plans are enrolled by more than 95% of Clover’s Medicare Advantage subscribers.
Implications Of The Improved Star Rating
The recalibration and enhancement of Clover Health’s Star rating by the CMS has been a significant boost for the company. This new rating is a testament to the superior quality of CLOV’s MA plans and has fostered considerable optimism about the company’s future strategy.
The improved rating not only strengthens Clover Health’s foundation of robust financial performance established over the past year but also enhances its capacity to scale its insurance business through a strong product offering. Furthermore, an increased Star rating enables Clover Health to enhance the benefits provided to its members.
Positive Outlook And Strategic Growth
Previously, Clover Health had anticipated operating with a 3.0 Star rating for its PPO plans for 2025. The recalculated rating of 3.5 Stars significantly enhances Clover Health’s financial outlook for the upcoming year. This improvement presents an opportunity for accelerated membership growth while sustaining and increasing profitability.
The announcement pertains to the 2022 measurement year, which corresponds to the 2025 payment year for Clover Health’s PPO MA plans. Each year, Medicare evaluates plans based on a 5-star rating system, and this recalibration reflects the high standards achieved by Clover Health.
