Leerink on Humana (HUM): 'Broad-Based Benefit Cuts Evident within Plan Finder for 2025'

Leerink on Humana (NYSE: HUM): 'Broad-Based Benefit Cuts Evident within Plan Finder for 2025'.

The analyst comments " Bottom Line: Analyzing Plan Finder suggests broad-based benefit cuts across plans with CVS (MP, Cherny) followed by UNH (OP) and HUM (OP) making the largest. Medicare Plan Finder went live for 2025 health plans today, giving us our first glimpse into plan benefit offerings. In general, plans seemed to be cutting particularly around certain supplemental benefits such pre-paid OTC cards or other prepaid flexible spending cards. In our opinion, CVS appeared to make the largest cuts to benefits followed by UNH (OP) and HUM (OP). ALHC (OP) also slightly scaled back benefits on the supplemental side while ELV (OP) stood out as cutting the least amongst our coverage. Today's weakness w/ HUM and ALHC was noticeably driven by elevated concerns on Stars. Addressing Stars and HUM's recent stock action. Noticeably absent in HUM's press release was any mention of Stars commentary vs. prior years. This was read and interpreted as an alarming red flag by investors. Additionally, when sorting Plan Finder by 4+ Star rated plans; HUM's largest H contract (44% of its membership) is filtered out in 2025 compared to 2024 (same with ALHC's top contract) while others remain listed. This could perhaps be a glitch, and plan's Star ratings continue to be listed as "coming soon." However, this certainly elevates the risk of slipping in Stars given challenged movement in cut points. This, of course, contributed meaningfully to the stock weakness."

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