Humana stock falls by 22.4% on Wednesday after the health insurer reported a sharp drop in enrollments for its top-rated Medicare plans. This decline raises concerns about the company’s projected 2026 revenue and bonus payments.
Humana stock falls
The sell-off wiped out nearly $4 billion from Humana’s market value. The downgrade in the quality rating of a key plan, which accounts for nearly half of its Medicare Advantage (MA) memberships, primarily caused this loss.
Decline in Member Enrollment Projections for 2025
Preliminary data for 2025 indicates that only 25% of Humana’s members—or 1.6 million people—will likely remain enrolled in its 4+ star-rated plans, down from 94% in 2024.
Possible Reasons for the Rating Cut
Humana attributes the ratings cut to narrowly missing the higher performance thresholds set by CMS. Analyst Scott Fidel from Stephens called this situation a “worst-case scenario” and downgraded the stock from “overweight” to “equal weight.”
Financial Impact and Revenue Risks
Analysts suggest that the rating downgrade could cut Humana’s bonus payments by approximately $3 billion, significantly affecting enrollments and profit margins by 2026.
Stock Performance and Future Outlook
Humana’s stock has already fallen 46.2% this year. It closed nearly 12% lower at $246.49 after hitting a four-year low of $213.31 on Wednesday.
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