Why Humana (HUM) Shares Are Plunging Today

What Happened?

Shares of health insurance company Humana (NYSE:HUM) fell 6.5% in the afternoon session after the Centers for Medicare & Medicaid Services (CMS) announced a significant expansion of its audit program for Medicare Advantage (MA) plans. 

This move suggests a more assertive regulatory stance that could lead to increased scrutiny of Humana's operations, which rely heavily on the Medicare Advantage market.

The shares closed the day at $227.15, down 7.6% from previous close.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Humana? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Humana’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was about 1 month ago when the stock dropped 15.3% on the news that peer UnitedHealth reported underwhelming first-quarter 2025 results as its sales and profits fell below Wall Street expectations. 

Guidance was the biggest concern. The new full-year earnings forecast came in well below what analysts expected, mainly because the company saw its care (medical costs in its privately run Medicare plans) and funding issues lasting longer. The news cast a shadow over other health insurers with similar offerings, hinting at tighter margins and more uncertainty ahead.

Humana is down 9.4% since the beginning of the year, and at $229 per share, it is trading 43.4% below its 52-week high of $404.52 from July 2024. Investors who bought $1,000 worth of Humana’s shares 5 years ago would now be looking at an investment worth $580.58.

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