- Humana shares dropped after losing a lawsuit over Medicare bonus payments, which could impact future profits.
- The company also faces broader scrutiny amid rising concerns about insurance claim denials across the industry.
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Shares of Humana Inc. HUM are trading lower Friday after the company lost a legal battle over Medicare bonus payments.
What To Know: A Texas district court dismissed Humana's lawsuit, upholding the government's decision to downgrade the company's Medicare quality ratings. The ruling is expected to reduce Humana's Medicare bonus payments beginning in 2026, posing a risk to future profitability. Following the court's decision, Humana shares dropped as much as 7.5% earlier in the session before settling lower, according to Bloomberg.
The ruling adds to growing scrutiny of the private health insurance industry, particularly concerning claim denials. Recent data compiled by Komodo Health for The New York Times revealed a 25% increase in prescription drug denials by private insurers between 2016 and 2023.
Humana's denial rates reportedly declined in the last two years of the study period but the industry as a whole saw higher rejection rates.
HUM Price Action: Humana shares were down 1.66% at $219.85 at the time of writing, according to Benzinga Pro.
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