Humana announced a significant reduction in its outlook for enrollments in 2022, prompting a 19% drop today. The drop erased over $10 billion in market cap from the insurance giant. 👋 👋 That’s no small loss for a Fortune 500 company, but it isn’t an unfamiliar one to $HUM longs.
Humana indicated that it expects 2022 net membership growth to be between 150,000 and 200,000 new Medicare Advantage customers. That’s nearly half of what was projected (325,000 to 375,000) for the year. The company cited “higher-than-anticipated terminations” in the election period. People are taking their business elsewhere.
Humana’s lost business will likely pop up with other health insurers, but those insurers fell in sympathy with Humana, too. In fact, Humana’s outlook cut prompted the entire sector to fall. Anthem and UnitedHealth Group took their own 4% dips. UnitedHealth Group’s fall represented the lion’s share of the Dow’s 170-point dip today. 🦁
Other players in the health sector also fell, including CVS Health (-3%), Centene (-4.3%), and Cigna (-3.8%.) On the whole, the SPDR Health Care Sector Fund ($XLV) fell 1.2% today.