Prime Highlights :
- Toy said the improved star rating gave the company more room to reinvest in members and support growth, but did not create the economics of its business model.
- Thornton said the company would allow more claims experience to emerge before assuming current growth trends would persist through year-end.
Key Facts :
- Clover Health is a Medicare Advantage insurer whose star rating was recalculated from 3.5 to 4.5 following a federal court ruling in May.
- The company posted $153 million in profit and $743 million in revenue for the second quarter, up 54% and 56% year-over-year respectively.
Background :
Clover Health’s Medicare Advantage membership rose 48% year-over-year in the second quarter to 157,309 members, with executives voicing growing confidence in the company’s 2027 outlook on the back of cohort maturation and a recalculation of its star rating.
Following a federal court ruling in May, the Centers for Medicare & Medicaid Services (CMS) recalculated Clover Health’s 2026 Medicare Advantage star rating from 3.5 to 4.5 stars. CEO Andrew Toy told investors during a Wednesday earnings call that the company was pleased with the outcome and was prepared to defend the district court’s decision after CMS recently announced its intent to appeal. Toy said the improved star rating gave the company more room to reinvest in members and support growth, though he added it did not create the economics of its model. He said the company’s confidence in 2027 stemmed from continued cohort maturation under Clover Assistant, which he expects to drive membership growth and expand profitability.
The company reported $153 million in profit, up 54% year-over-year, and total revenue of $743 million, up 56% year-over-year. Interim CFO Clay Thornton said the underlying Medicare Advantage plan continued to strengthen, and that strong first-half performance supported the raised guidance.
For the full year, Clover now expects revenue of $2.92 billion to $3 billion and adjusted EBITDA of $70 million to $80 million, with average Medicare Advantage membership projected between 156,000 and 158,000. Thornton said the outlook remained balanced, noting the company would allow more claims experience to emerge before assuming current trends would hold through year-end.
Toy also said the company was working quickly to bring AI solutions to its back-office insurance operations to improve claims processing and reduce administrative costs.
