Why did Humana lose star ratings?
Asked by: Mr. Sanford Kuhlman Jr. | Last update: April 18, 2025Score: 4.7/5 (69 votes)
What went wrong with Humana?
Humana's stock dived when it announced a sharp decline in memberships for the top-rated Medicare Advantage (MA) plan. There are serious concerns among investors that the company may not be as attractive an income investment play as it used to be. Humana earns revenue through healthcare services and health insurance.
Why was Humana downgraded?
The ratings downgrade Humana Health of Puerto Rico Group and outlook revision to negative reflect its weakening risk-adjusted capitalization measures, driven by significant operating losses since 2023.
Did Humana shares plunge as Medicare ratings fall?
Humana's shares fell as much as 5.8% after markets closed in New York. One of Humana's largest contracts that covers almost half its Medicare Advantage membership dropped to a lower rating on the government's star system, jeopardizing bonus payments from the US health program for the elderly and disabled due in 2026.
Is Humana in trouble financially?
Humana shares, among the sector's most hard hit, have fallen nearly 44% so far this year, after the company withdrew its 2025 forecast previously, citing disappointing government Medicare reimbursement rates.
Humana’s Historic Stock Plunge: Medicare Star Ratings Shake Market
What is going on with Humana insurance?
Humana has announced that it will be exiting the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs. No other Humana health plan offerings are materially affected.
Why did Humana star ratings drop?
More than one dozen of Humana's plans received lower stars because of the higher cut points, the payer said. Humana also accused the CMS of not giving the insurer a chance to verify regulators' calculations, in a break with historical norms.
Why is Humana stock down so much?
Shares of Humana have sunk since the CMS rating came out last week, adding to a slump that began in January when the company first warned that higher medical costs and government regulations would hurt profits. Investopedia requires writers to use primary sources to support their work.
Who is the largest Medicare Advantage organization?
- UnitedHealthcare is the largest provider of Medicare Advantage plans. ...
- Aetna is a CVS Health company and is the fourth-largest provider of Medicare Advantage plans.
What is the Humana Medicare star rating lawsuit?
Humana sued the CMS to contest its 2025 “star ratings,” which determine how much it will receive in 2026 from the Medicare Advantage Quality Bonus Payment program. The complaint involves disputed encounters between CMS test callers and the insurer's call center staff.
Where does Humana rank in healthcare?
U.S. News ranked Humana No. 1 nationally for its 2024 Medicare Advantage plan offerings in the following categories: 2024 Best Overall Medicare Advantage Plan Company. 2024 Best Company for Member Experience.
What states is Humana pulling out of?
Similarly, because of CVS Health Aetna's moves, Humana now feels secure with losing 5% of its Medicare Advantage plan enrollees after it exits unprofitable markets, primarily in the Southeastern states of Florida, North Carolina, Georgia, Texas, and Illinois.
Is Humana reputable?
Humana, Inc. is BBB Accredited.
This business has committed to upholding the BBB Standards for Trust.
What is the two midnight rule for Humana?
What is the two-midnight rule? The two-midnight rule, enacted in 2013, states that traditional Medicare must pay for an inpatient stay if admitting clinicians anticipate patients will remain in the hospital for at least “two midnights.” Beginning this year, Medicare Advantage insurers must also follow the rule.
Why are hospitals dropping Humana Medicare Advantage plans?
Among the most commonly cited reasons are excessive prior authorization denial rates and slow payments from insurers. In 2023, Becker's began reporting on hospitals and health systems nationwide that dropped some or all of their Medicare Advantage contracts.
Why is Humana crashing?
The company said the main reason for that drop is that the 2025 rating for its H5216 plan, which contains about 45% of Humana's MA membership, fell to 3.5 stars from 4.5 stars in 2024. The H5216 plan also includes more than 90% of its employer group waiver plan membership.
What is the problem with Humana?
Like other health insurers, Humana has been battling with elevated costs due to higher demand for medical care, and lower-than-expected payments from the government for managing healthcare for these members.
Is Humana insurance in financial trouble?
Analysts expect Humana's earnings to drop 38% in 2024, to $16.18 per share from $26.09 in 2023, according to FactSet. Analysts had been anticipating a recovery in 2026, with earnings climbing back to $25.77 per share.
Why is Humana falling?
And yet HUM share price is down 33% year-to-date. Why is Humana stock dropping? Humana stock has been dropping this year due to higher Medicare Advantage costs that have hurt medical loss ratios as service usage rose.
Does Humana have a 5-star rating?
Humana Medical Plan, Inc. is one of four of Humana's 2024 contracts that received a 5-star rating on CMS's 5-star rating system. Combined, the four 5-star contracts cover approximately 790,000 members nationwide, more than doubling the number of members in 5-star plans in 2023.
Did UnitedHealthcare buy out Humana?
United HealthCare Corp.'s acquisition of Humana Inc., once valued at $5.5 billion, has been derailed by a plunge in United's stock price. The companies said today that they mutually agreed to scrap the deal, which would have created one of the nation's largest managed-care companies.
Why are people leaving Medicare Advantage plans?
Key takeaways: People leave Medicare Advantage plans because out-of-pocket costs vary between plans, network restrictions can cause frustration, prior authorization requests can delay care, and it can be difficult to use the additional benefits they provide.
How much does Humana cost per month for seniors?
Premiums for Humana's plans start at $0 per month in addition to your Medicare Part B premium. In 2024, the standard part B premium amount is $174.70, but this number can go all the way up to $594 per month for high-earning seniors3.
Are there any 5 star Medicare Advantage plans?
The 5-star Special Enrollment Period provides an opportunity for you to switch to a 5-star Medicare Advantage-only plan, a 5-star Medicare Advantage Plan with prescription drug coverage, or a 5-star Medicare Prescription Drug Plan.