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Editorial Advisory Board

  • Professor Andrea M. Armani, University of Southern California
  • Ruti Ben-Shlomi, Ph.D., LightSolver
  • James Butler, Ph.D., Hamamatsu
  • Natalie Fardian-Melamed, Ph.D., Columbia University
  • Justin Sigley, Ph.D., AmeriCOM
  • Professor Birgit Stiller, Max Planck Institute for the Science of Light, and Leibniz University of Hannover
  • Professor Stephen Sweeney, University of Glasgow
  • Mohan Wang, Ph.D., University of Oxford
  • Professor Xuchen Wang, Harbin Engineering University
  • Professor Stefan Witte, Delft University of Technology

Why Humana (HUM) Shares Are Plunging Today

HUM Cover Image

What Happened?

Shares of health insurance company Humana (NYSE: HUM) fell 5.2% in the afternoon session after the company announced it will reduce the reach of its Medicare Advantage plans next year, citing rising costs. The health insurer will decrease its Medicare Advantage presence from 48 states to 46 and will cover 85% of U.S. counties, down from 89% this year. This decision comes as insurers face higher utilization of medical services and claim that government payments have not kept up with increasing costs. The pullback is not unique to Humana, as other major insurers are also retreating from less profitable markets. For instance, CVS Health's Aetna announced a similar reduction in its plan offerings. Despite the smaller footprint for its main Medicare Advantage plans, Humana did note that it expects to lower premiums for about 83% of its stand-alone prescription drug plans in the coming year.

The shares closed the day at $246.77, down 5.2% 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 Is The Market 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 previous big move we wrote about was 6 days ago when the stock dropped 2.9% on the news that the U.S. Commerce Department initiated a national security investigation into medical equipment and devices, raising concerns about potential tariffs. The probe, conducted under Section 232 of the Trade Expansion Act, examines whether imports of items like syringes, infusion pumps, and surgical instruments pose a national security risk. Such investigations can pave the way for new import duties, creating a significant overhang for the sector. The goal of potential tariffs would be to boost domestic manufacturing by increasing the cost of foreign goods. This development has introduced new uncertainty for the industry, leading to broad-based declines in the stocks of major manufacturers, including Baxter International and GE HealthCare, as investors weigh the potential impact on supply chains and costs.

Humana is down 2.3% since the beginning of the year, and at $246.77 per share, it is trading 20.9% below its 52-week high of $312 from September 2025. Investors who bought $1,000 worth of Humana’s shares 5 years ago would now be looking at an investment worth $594.11.

Today’s young investors won’t have read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.

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