Health Insurer’s Stock Plummets Following Medicare Advantage Rating Downgrade
Humana, a leading provider of Medicare Advantage coverage, saw its stock value plummet on Wednesday after announcing a significant drop in its quality rating. The insurer revealed that the number of customers enrolled in plans with a rating of four stars or higher for 2025 has decreased by a staggering 94% compared to the previous year.
The rating of one of Humana’s largest national insurance plans, which accounts for 45% of its enrollment, fell by a single point to 3.5 stars. This downgrade is expected to impact the company’s future bonus payments, which are tied to the quality of its Medicare Advantage plans.
Medicare Advantage plans are privately operated versions of the federal government’s Medicare program, primarily serving individuals aged 65 and older. The annual enrollment period for 2025 coverage begins on October 15 and runs until December 7.
Humana is currently in discussions with federal officials regarding the rating reduction and is focused on improving its performance to regain its star rating. While the company does not anticipate the downgrade to affect its results or outlook for this year and next, it is exploring options to mitigate the revenue impact expected in 2026.
The news sent Humana’s stock tumbling, with shares losing nearly $60 in value before the market opened on Wednesday. The price dropped 21% to $219.88, adding to the company’s already significant losses this year, which have seen its stock fall by around 39%.
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