Humana Stock Sinks on Weak Medicare Star Ratings: What to Know
Humana stock is spiraling Wednesday after the CMS provided preliminary Star Ratings data for the insurer's 2025 Medicare Advantage plans.

Humana (HUM) stock is plunging in Wednesday's session after the health benefits company announced preliminary 2025 Medicare Advantage (MA) Star Ratings data provided by the Centers for Medicare and Medicaid Services (CMS).
HUM is down 15% at last check, making it the worst S&P 500 stock so far today. And this follows a 12% decline in the stock yesterday when the CMS plan finder website included Star Ratings for 2025 plans.
In a filing with the Securities and Exchange Commission (SEC) this morning, Humana said that approximately 1.6 million, or 25%, of its members are currently enrolled in MA plans that are rated as four stars and above for 2025, which is down from 94% in 2024.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"The decline in Stars performance for 2025 will impact Humana's quality bonus payments in 2026," Humana said in the filing. "2025 Star rating details are expected to be formally released by CMS on or around October 10th."
However, Humana went on to say that it believes "there may be potential errors" in the calculations by the CMS. It currently has outstanding appeals and said it has requested additional information to ensure the accuracy of the ratings.
"Despite ongoing appeal efforts, the Company is disappointed with its performance and has initiatives underway focused on improving its operating discipline and returning to an industry leading Stars position as quickly as possible," Humana said, adding that it "is exploring all available options to mitigate the expected 2026 revenue headwind related to its 2025 Star ratings in the event its challenges to the results are unsuccessful."
Is Humana stock a buy, sell or hold?
Humana has woefully underperformed the broader market so far this year, down 38% on a total return basis (price change plus dividends) vs the S&P 500's 21% gain. Yet, Wall Street remains bullish on the healthcare stock.
According to S&P Global Market Intelligence, the average analyst target price for HUM stock is $384.28, representing implied upside of more than 60% to current levels. Additionally, the consensus recommendation is Buy. However, these ratings and price targets may very well change following the news.
Financial services firm Argus Research has already moved to the sidelines when it comes to the large-cap stock, as evidenced by its Hold rating.
"Humana faces headwinds to revenue and earnings growth, as its profit margin is squeezed by an increase in medical utilization," wrote Argus Research analysts David Toung and Owen Shelley in an August 13 note. "Despite the favorable demographics of an aging population, with some 26 million Americans aging into Medicare-eligibility from 2023 through 2030, we are concerned that Medicare Advantage is not an unalloyed growth vehicle."
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.
Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
-
Trump's Sovereign Wealth Fund: What Is It And How Does It Work?
President Trump signed an executive order that puts in motion plans for a U.S. sovereign wealth fund. Here's what a sovereign wealth fund is and how it works.
By Charles Lewis Sizemore, CFA Published
-
Honeywell Stock Is at the Bottom Of the Dow After Split News
Honeywell is the worst Dow Jones stock Thursday as the industrial conglomerate's weak outlook offsets news that it is splitting into three separate companies.
By Joey Solitro Published
-
Trump's Sovereign Wealth Fund: What Is It And How Does It Work?
President Trump signed an executive order that puts in motion plans for a U.S. sovereign wealth fund. Here's what a sovereign wealth fund is and how it works.
By Charles Lewis Sizemore, CFA Published
-
Honeywell Stock Is at the Bottom Of the Dow After Split News
Honeywell is the worst Dow Jones stock Thursday as the industrial conglomerate's weak outlook offsets news that it is splitting into three separate companies.
By Joey Solitro Published
-
Roblox Stock Plunges After Bookings, Users Fall Short of Expectations
Roblox stock is down Thursday after the gaming company came up short on key metrics for its fourth quarter. Here's what you need to know.
By Joey Solitro Published
-
Eli Lilly Stock Rises After Profit, Outlook Top Expectations
Eli Lilly stock is higher Thursday after the pharma giant beat fourth-quarter profit expectations and issued strong 2025 guidance. Here's what you need to know.
By Joey Solitro Published
-
Qualcomm Stock Drops After Its Earnings Beat. Here's Why
Qualcomm stock is lower Thursday even after the chipmaker reported strong earnings and gave an encouraging outlook. This is what investors need to know.
By Joey Solitro Published
-
The Best ROI? Investing in Yourself This Year
If personal growth is something you invest in only after taking care of all other priorities, it's time to turn that mindset on its head. Here's how to start.
By Frank J. Legan Published
-
The Four Worst Mistakes to Make When Selling Your Business
From ignoring potential buyers to failing to consider what you'll do once you've stopped working, here are the key mistakes to avoid when selling a business.
By Evan T. Beach, CFP®, AWMA® Published
-
Stock Market Today: Stocks Waver as Big Tech Slumps on Spending Concerns
Markets seesawed amid worries over massive costs for artificial intelligence and mixed economic news.
By Dan Burrows Published