Humana Faces Major Setback as 2025 Medicare Advantage Ratings Drop, Shares Plunge 23%

Oct 2, 2024, 11:58 AM

Humana Inc. has disclosed a significant risk to achieving its Medicare Advantage (MA) margin target of at least 3% by 2027. The Centers for Medicare and Medicaid Services (CMS) released preliminary 2025 MA Star Ratings data, revealing that only 25% of Humana's members, approximately 1.6 million, aged 65 years and above, are enrolled in plans with at least a four-star rating. This is a steep decline from about 94% in the previous year. As a result, Humana's shares plummeted 23% in premarket trading, marking the company's biggest one-day drop since 2009. The downgrade in star ratings is expected to cost the company billions. The shares had already seen a 12% loss after the news broke late in the previous trading session.