Jim Cramer Notes That "Humana Got Hit the Hardest" By Centers for Medicare & Medicaid Services Announcement

Humana Inc. (NYSE:HUM) is one of the noteworthy S&P 500 stocks Jim Cramer highlighted. Cramer highlighted what caused an instant sell-off in companies like Humana and others that had exposure to Medicare Advantage. The Mad Money host stated:

The third worst performer in the S&P last month was Humana, the managed care company with a lot of exposure to Medicare Advantage. These are healthcare plans for senior citizens that are subsidized by the federal government. Last Monday night, the Centers for Medicare & Medicaid Services announced that they’d pretty much keep payments to private insurers next year almost flat. Wall Street was looking for 5%. Now, get this, this was from Mehmet Oz. He’s in this business. I mean, he understands this business, and he was the regulator, and he’s had it, okay? He’s had it.

Now, this caused an instant sell-off for any company with Medicare Advantage exposure. Humana got hit the hardest. Now, many companies offering these plans have been struggling to price them appropriately, suffering big losses because the benefits were too generous. I viewed Humana’s Medicare Advantage, and I gotta tell you, it is terrific. But the question was, was it too terrific? And if the federal subsidy starts lagging behind the rate of inflation, that’s only going to get worse. I don’t know. My view, it used to be the Democrats who went after health insurance, but now it’s the Republicans that are cracking down. I think it’s brutal. I think it really is, spells like, I don’t say the end of anything because these are smart companies, but you can’t touch them.

Humana Inc. (NYSE:HUM) provides several medical insurance plans and prescription drug programs along with its own network of primary care centers and home health services.

While we acknowledge the potential of HUM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.