---
title: "Humana stock tanks 20% on disappointing Medicare Advantage data"
description: "Humana Inc (NYSE: HUM) shares plummeted over 20% due to disappointing preliminary Medicare Advantage data, revealing only 25% of members enrolled in high-rated plans for 2025, down from 94% in 2024. T"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/215817118.md"
published_at: "2024-10-02T15:50:04.000Z"
---

# Humana stock tanks 20% on disappointing Medicare Advantage data

> Humana Inc (NYSE: HUM) shares plummeted over 20% due to disappointing preliminary Medicare Advantage data, revealing only 25% of members enrolled in high-rated plans for 2025, down from 94% in 2024. The decline is attributed to a drop in the rating of its H5216 plan, affecting 45% of memberships. Analysts expect this to impact 2026 earnings significantly. Despite the setback, Humana is actively working to address the issues and improve ratings, with analysts maintaining an "overweight" rating on the stock, citing potential for recovery and dividend attractiveness.

Humana Inc (NYSE: HUM) opened more than 20% down this morning on rising concerns related to its Medicare Advantage programme.

The insurance giant now has only 25% (1.6 million) of its members enrolled in MA plans rated 4-star or higher, as per preliminary data for 2025 by the Centers for Medicare and Medicaid Services (CMS) published on October 1.

That’s bad news for Humana as it had a whopping 94% of its members enrolled in such Medicare Advantage plans in 2024. Shares of the healthcare behemoth are now down more than 50% year-to-date.

## Why is it significant for Humana stock?

Humana attributed the sharp decline primarily to its H5216 plan that had its rating dropped from 4.5 in 2024 to 3.5 for 2025.

The said plan includes about 45% of the company’s Medicare Advantage memberships and over 90% of its employer group waiver plan membership.

Ann Hynes – a Mizuho analyst, therefore, expects the development to “significantly impact 2026 rebates and quality payments from the government.”

Note that plans with star rating of 4.5 or above accrue 70% rebate on savings versus 50% only for 3.5 stars rated plans.

Mizuho’s Hynes expects the CMS data to remain an overhang for HUM share price until the official ratings are announced.

“While there are several key unknowns to come up with an EPS impact, any drop in star ratings will be a headwind to the company’s 2026 earnings recovery,” she told clients in a research note today.

## Humana is committed to fixing these issues

On Wednesday, Humana expressed disappointment in its performance but disputed the drop in rating as well, saying it may have been due to potential errors in CMS’ calculation.

“The company has outstanding appeals related to certain results and has requested additional information to ensure accuracy of threshold calculations,” Humana added.

Meanwhile, the New York listed firm has already launched initiatives to improve star ratings and is leaving no stone unturned to dilute the related hit to its 2026 revenue, the company confirmed.

Mizuho analyst Ann Hynes also conceded that today’s development while disappointing, is not structural and “given the company’s track-record of excellence for historical star ratings, we’d expect it to fix these issues to regain ratings next year.”

Heading into Wednesday, Wall Street had a consensus “overweight” rating on Humana stock.

Analysts saw upside in it to $390 on average that translates to well over 70% upside from here. HUM shares remain attractive for income investors as they pay a dividend yield of 1.27% as well.

The post Humana stock tanks 20% on disappointing Medicare Advantage data appeared first on Invezz

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.
