Humana plunges as Medicare quality rating drop threatens revenue

Published On Oct 2, 2024, 9:33 AM

Humana Inc. recently experienced a significant drop in its share price, plummeting by over 22% after experiencing a decrease in Medicare Advantage quality ratings. This drop poses a major risk to the company's revenue as these ratings affect bonus payments insurers receive. Humana noted that only 25% of members are in plans rated four stars and above, down from 94%, with potential earnings being hit hard in the future. The downgrade in ratings could result in a loss of approximately $9 per share by 2026 if the current trajectory holds. Despite this setback, Humana aims to appeal the ratings and is actively working on improving its situation.

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Negative

Due to the recent healthcare quality ratings drop and the subsequent decline in share price, Humana Inc. is facing significant revenue challenges. If the ratings remain low, the company may not only struggle to attract new members, but also risk losing current ones, further affecting earnings. This situation is exacerbated by rising medical costs and tighter government reimbursements, pointing to a continued downward pressure on the stock. Therefore, it's advisable for investors to consider a negative outlook for Humana's stock in the near term.

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Humana plunges as Medicare quality rating drop threatens revenue

Oct 2, 2024, 9:33 AM

(Bloomberg) -- Humana Inc. shares plummeted the most in 15 years after the insurer suffered a drop in Medicare Advantage quality ratings, posing a drastic threat to revenue. Most Read from BloombergA 7,000-Year-Old City Emerges as a Haven from Dubai’s Sky-High RentsGang Violence Is Moving to the Amazon’s Fast-Growing CitiesA Housing Crisis Brews in Rwanda’s Capital CityNew Rowhouses in London That Offer a Bridge to the 19th CenturyAbout a quarter of members in plans that Humana manages for the U

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