This is a transformative regulatory victory that should substantially increase Clover's Medicare Advantage revenue for Payment Year 2027. Traders should watch for the CMS final rate notice and the company's updated bid submission. The 4.5-Star rating shifts Clover from a below-average plan to a top-tier performer, which may also improve enrollment growth and reduce churn. Consider building/longing CLOV ahead of formal bid announcement.
Price Chart
Executive Summary
Clover Health secured a major win in federal court, successfully overturning a 3.5 Star Rating on its PPO plan and obtaining a recalculated 4.5 Star Rating from CMS for Payment Year 2027. This rating applies to over 97% of Clover's members, representing a material improvement in its Medicare Advantage revenue trajectory.
Key Facts
- U.S. District Court for the Southern District of Georgia granted partial summary judgment in favor of Clover on May 29, 2026, setting aside the 3.5 Star Rating for Contract H5141.
- On June 9, 2026, CMS recalculated Clover's 2026 Star Rating for Contract H5141 (PPO plan) as 4.5 Stars, consistent with the court order.
- The 4.5 Star Rating applies to Clover's PPO plan, which covers over 97% of its members.
- Clover was instructed to submit alternate bids at the 4.5 Star level for Payment Year 2027.
- Clover's HMO plans (Contract H8010) remain at a 4.0 Star Rating, unchanged by this litigation.
Financial Impact
Moving from 3.5 to 4.5 Stars triggers significantly higher quality bonus payments and more favorable benchmark revenue from CMS. A 1-star improvement typically increases per-member per-month revenue by $30-$50 in MA, implying a potential annual revenue uplift of $200M+ given Clover's member base.
Risk Factors
- CMS policy changes or administrative appeals could alter or delay implementation of the 4.5-Star rating.
- The actual revenue impact depends on the specific bid and premium structure submitted at the 4.5-Star level.
- Litigation from competitors or regulatory challenges to the court ruling could create uncertainty.
- HMO plans (3% of members) remain at 4.0 Stars and are not affected.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 4 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001801170-26-000137 |
| Document: 0001801170-26-000137-index-headers.html | 0001801170-26-000137 |
| Document: 0001801170-26-000137-index.html | 0001801170-26-000137 |
| Document: 0001801170-26-000137.txt | 0001801170-26-000137 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Sep 15, 2026 16d ago | Insider Cluster | $4.56 $4.57 | ▲ +0.22% | ▼ −2.34% | $4.41 (−3.40%) |
Aug 17, 2026 6w ago | Insider Cluster | $4.23 $4.13 | ▲ +2.36% | ▲ +2.16% | $4.41 (−4.14%) |
Aug 11, 2026 7w ago | Court Ruling | $4.39 $4.23 | ▼ −3.64% | ▼ −3.24% | $4.41 (+0.34%) |
Jul 20, 2026 10w ago | Insider Cluster | $4.79 $4.27 | ▼ −10.86% | ▼ −9.63% | $4.41 (−8.04%) |
Jul 17, 2026 11w ago | Insider Cluster | $4.62 $4.55 | ▼ −1.52% | ▼ −0.83% | $4.41 (−4.65%) |
Jul 16, 2026 11w ago | Insider Cluster | $4.62 $4.55 | ▼ −1.52% | ▼ −0.83% | $4.41 (−4.65%) |
Jul 16, 2026 11w ago | Insider Cluster | $4.62 $4.55 | ▼ −1.52% | ▼ −0.83% | $4.41 (−4.65%) |
Jul 9, 2026 12w ago | Insider Cluster | $4.68 $4.40 | ▼ −5.98% | ▼ −5.85% | $4.41 (−5.88%) |
Jul 6, 2026 12w ago | Insider Cluster | $5.00 $4.82 | ▼ −3.60% | ▼ −4.15% | $4.41 (−11.90%) |
Jun 17, 2026 15w ago | Insider Cluster | $4.80 $5.21 | ▲ +8.54% | ▲ +9.58% | $4.41 (−8.23%) |
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