Health insurer Humana (HUM) revealed Medicare Advantage plans for 2025 on Tuesday. This announcement came just ahead of the start of enrollment for Medicare Advantage plans on October 15, which will run through December 7. Medicare Advantage plans are offered by private insurers, who receive a fixed payment from the U.S. government to manage healthcare for older individuals seeking additional benefits not covered by regular Medicare.
Humana Unveils Medicare Advantage Plans for 2025
Humana, which will offer a total of 793 individual Medicare Advantage plans nationwide next year, has stated that all plans providing prescription drug coverage will see benefit enhancements in 2025 under the Inflation Reduction Act. Furthermore, the health insurer will provide special needs plans for individuals enrolled in Medicare who also receive Medicaid assistance, which helps cover medical expenses for those with low income.
In addition to this, the company is offering coverage for dental, hearing, and vision care. Looking ahead to 2025, Humana plans to expand its Medicare Advantage offerings to cover 48 states, along with Washington, D.C., and Puerto Rico. This expansion will allow the company to serve 89% of U.S. counties, ensuring broader access to healthcare benefits.
HUM Stock Declines Following 2025 Medicare Advantage Plans
However, shares of HUM fell by more than 20% in pre-market trading on Wednesday following this announcement and some more bad news. The company announced that the total number of members enrolled in its highly rated, four stars and above, Medicare Advantage plans for people aged 65 years and above was 1.6 million or 25% of its total members for 2025. This was a huge drop from 94% in 2024.
Additionally, HUM stated that the star rating for one of its contracts, which comprises 45% of Humana’s Medicare Advantage memberships, dropped to 3.5 from 4.5. Star ratings are crucial for health insurers as they reflect the quality of the insurance plans. The dip in this contract’s rating will likely impact the company’s quality bonus payments in 2026.
Is HUM a Good Stock to Buy?
Analysts remain cautiously optimistic about HUM stock, with a Moderate Buy consensus rating based on six Buys and Holds each. Over the past year, HUM has declined by more than 40%, and the average HUM price target of $387.75 implies an upside potential of 38.8% from current levels.
