Clover Health's Medicare Advantage membership grew 48% year-over-year in the second quarter at 157,309 members, as executives expressed increasing confidence in its 2027 outlook given cohort maturation and recalculation of its star rating.
Following a federal court ruling in May 2026, the Centers for Medicare & Medicaid Services recalculated Clover Health's 2026 Medicare Advantage star rating from 3.5 to 4.5 stars.
Clover Health CEO Andrew Toy told investors during a Wednesday earnings call the company was “pleased” with the outcome. Toy said it is prepared to defend the district court’s decision in the recently announced intent to appeal from the U.S. Centers for Medicare and Medicaid Services (CMS).
“[The stars rating] gives us more room to reinvest in members, maintain a highly competitive product, support growth, and expand profitability, but it does not create the economics of our model,” Toy said. “Our confidence in 2027 is grounded in the continued cohort maturation under Clover Assistant, which we believe will allow us to grow membership and meaningfully expand profitability.”
The company posted $153 million in profit, up 54% year-over-year, and total revenue of $743 million, up 56% year-over-year, according to financial results published Wednesday afternoon.
Clover Health Interim CFO Clay Thornton said the company’s underlying Medicare Advantage plan “continues to strengthen,” adding increased guidance reflects a strong performance in the first half of the year.
“The first half gives us greater confidence that this year's growth is converting into the long-term earnings profile we expected,” Thornton said.
For the full year, according to Thornton, Clover now projects revenue of $2.92 billion to $3 billion and adjusted EBITDA earnings of $70 million to $80 million.
It also expects membership in Medicare Advantage to average between 156,000 and 158,000, Thornton said.
“These updates reflect our increasing confidence in the underlying performance of the business after six months of execution,” Thornton said. “That said, this remains a balanced outlook, one that recognizes the strength we are seeing while maintaining appropriate discipline in the second half. With a large portion of our membership still in the early stages of our care, we believe it's prudent to allow additional claims experience to emerge before assuming current trends will persist through year end.”
Reiterating Clover’s commitment to artificial intelligence, Toy ended Wednesday’s earnings by telling investors the company is working “quickly” towards bringing AI solutions to its “back office insurance operations.”
“We believe that will help us better support our members, improve speed and accuracy of claims processing and completely change the way we scale the business with regard to admin expense,” Toy said. “This should compound the margin opportunity we expect over time. By doing this, we think AI will drive both aspects of our business.”