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Humana (NYSE: $HUM) Plummets 13%+ on Tuesday Following Medicare Rates Announcement

Humana Inc. (NYSE: $HUM) is a leading health insurer that offers Medicare Advantage, Medicare prescription drug plans, and group and individual health insurance coverage. Humana serves millions across the United States through its comprehensive network of healthcare providers and facilities, operating in all 50 states and Puerto Rico. 

Humana Inc. (HUM) faced a significant setback as its stock plummeted more than 13% upon the stock market’s opening on Tuesday, hitting a four-year low. This downturn is directly linked to the Biden administration’s firm stance on Medicare Advantage payment rates, which fell below insurance companies’ expectations. 

Medicare Advantage Rates Shock Investors 

In January, the Centers for Medicare and Medicaid Services (CMS) proposed an average 3.7% increase in private Medicare Advantage rates for 2025. However, the regulator’s decision to adhere to the proposed rates, announced late Monday, shocked investors. As Bloomberg reported, JPMorgan Securities analysts noted that final rates have failed to increase from initial proposals once in the past decade. 

The Medicare Advantage program disburses billions of dollars to private insurers, providing coverage to millions. However, these plans are under scrutiny regarding expenses and patient care accessibility. In the past, allegations of overpayment have sparked disputes among stakeholders within the healthcare industry. 

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Humana and Pharmacist Collaboration 

Despite the stock market turmoil, Humana Healthy Horizons, the Medicaid unit of Humana, announced a positive development today. The organization is partnering with CPESN® USA in Ohio to expand access to pharmacists for its members nationwide. This collaboration addresses a crucial need, particularly for residents in rural and underserved communities. 

These communities rely heavily on local pharmacies for a wide range of healthcare services beyond simply dispensing prescriptions. Pharmacies in these areas can provide services like chronic condition management, screenings, vaccinations, and more. 

Kathie Mancini, President of Humana Healthy Horizons – Ohio, expressed optimism about the partnership’s potential to enhance access to care for thousands of Ohioans and drive positive health outcomes. This initiative underscores Humana’s commitment to addressing health-related social needs and ensuring quality, accessible care. 

Humana & DUOS: Empowering Louisiana Veteran Healthcare 

Furthermore, Humana partnered with DUOS, a technology-enabled service provider, on March 20, 2024, to enhance healthcare outcomes for Louisiana Veteran members with chronic conditions.  

The program connects Veterans with chronic conditions to DUOS for health assessments, then pairs them with benefits and resources available through their Medicare Advantage plan and Veterans’ benefits.  This initiative highlights Humana’s commitment to ensuring Veterans receive the comprehensive and personalized support they deserve. 

Upcoming Earnings Report 

Humana is expected to report its first-quarter 2024 earnings on April 24th, 2024, before the market opens. Analysts’ consensus forecast predicts an EPS of $6.05, significantly lower than the reported EPS of $9.38 for the same quarter last year.  

Humana Stock Performance 

HUM stock is trading at $304.88 a few minutes to the closing bell, a decline of 13.25% from the previous close of $351.45. The current trading price is below the 50-day Moving Average of $360.81 and the 200-day Moving Average of $447.62. 

Looking at the broader market, Humana’s stock has declined by 30.17% over the past 52 weeks, while the S&P 500 has gained 27.88% during the same period. The stock’s 52-week high is $541.21, and the 52-week low is $299.23. Over the past 10 days, the average trading volume is 1.26 million shares, and the company’s market capitalization is $36.091 billion. 

Humana Inc. (HUM)
Humana (NYSE: $HUM)

Is HUM Stock a Buy? 

Humana shares plunged after the government finalized lower-than-expected Medicare Advantage payment rates. Despite the short-term shock, analysts maintain a moderate buy recommendation with an average price target of $413.19, suggesting a potential 36% upside.  

Humana’s commitment to expanding access to care through partnerships like CPESN® and DUOS offers a positive long-term outlook. Upcoming earnings on April 24th will be crucial in gauging the company’s financial health. 

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