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Humana Inc. (NYSE: HUM) Securities Fraud Class Action

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COMPANY       Humana Inc. 
COURT United States District Court for the District of Delaware
CASE NUMBER 1:24-cv-00655-JLH
JUDGE The Hon. Jennifer L. Hall
CLASS PERIOD  July 27, 2022, through January 24, 2024


If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at

Case Background:

A class action lawsuit has been filed on behalf of those who purchased or acquired Humana Inc. (“Humana”) (NYSE: HUM) common stock between July 27, 2022, and January 24, 2024, both dates inclusive (the “Class Period”).

Humana, a Delaware corporation with principal executive offices in Louisville, Kentucky, is a health insurance company that provides medical benefit plans to approximately 17 million members.  As is relevant here, Humana offers individual Medicare plans (approximately 70% of the Company’s retail revenues), group Medicare plans (approximately 8% of the Company’s retail revenues), commercially fully-insured plans, and specialty medical benefit plans.

The Class Period begins on July 27, 2022, to coincide with the Company’s announcement of its second quarter 2022 financial results.  As is relevant here, Humana reported adjusted earnings per share (“EPS”) of $8.67 for the quarter, an “outperformance” of approximately $1.00 per share higher than the Company’s previous projections.  Humana stated that its “outperformance” versus prior expectations was “driven primarily by . . . better-than-anticipated medical cost trends in the company’s individual Medicare Advantage and Medicaid businesses” and further explained that medical costs for Humana’s individual Medicare Advantage business were “running favorable to our expectations.”  Throughout the Class Period, Defendants continued to assure investors—and analysts who repeatedly inquired about potential pent-up demand for healthcare services that built-up under COVID restrictions—that “in-patient unit costs and non-in-patient trends [were] coming in lower than [the Company] initially estimated” and that “there really isn’t pent-up demand that [the Company has] to be concerned about” negatively impacting utilization rates and profitability.  

Despite these assurances, investors began to learn the truth about the pressures on the Company’s profitability on June 13, 2023, when UnitedHealth Group Inc. (“UnitedHealth”), one of Humana’s primary health insurer competitors, revealed that it was seeing “higher levels” of outpatient care activity and suggested that higher utilization rates were due to “pent-up demand or delayed demand being satisfied.”  UnitedHealth further explained that it was “seeing very strong volumes” in certain areas, including ambulatory surgery, and an overall “higher number of cases that are being performed.”  Given the similarities in Humana’s and UnitedHealth’s businesses, and the likelihood that Humana was also suffering from increased utilization and costs due to pent-up demand, the price of Humana common stock declined $57.63 per share, or more than 11%, from a close of $512.63 per share on June 13, 2023, to close at $455.00 per share on June 14, 2023.  

Just three days later, on June 16, 2023, Humana confirmed that it also was seeing “higher than anticipated non-inpatient utilization trends, predominately in the categories of emergency room, outpatient surgeries, and dental services, as well as inpatient trends that have been stronger than anticipated in recent weeks, diverging from historical seasonality patterns.”  Although the Company re-affirmed its full year insurance segment benefits expense ratio guidance (a key measure of profitability) of between 86.3% and 87.3%, it warned investors that it “now expects to be at the top end of this full year range”—i.e., reduced profitability.  Additionally, Humana explained that it now “assume[d] it will continue to experience moderately higher-than-expected trends for the remainder of the year.”  On this news, the price of Humana common stock declined $18.20 per share, or almost 4%, from a close of $463.85 per share June 15, 2023, to close at $445.65 per share on June 16, 2023.

Following these initial admissions regarding escalating utilization rates, the Company announced additional increases in its expected medical costs.  In August 2023, Defendants revealed that the utilization rate increases first disclosed in June had stabilized at the new higher levels.  Then, on November 1, 2023, Defendants announced that the Company was increasing its benefits expense ratio for 2023 to approximately 87.5% (from a range of 86.3% to 87.3% projected earlier in the year), which implied a fourth quarter ratio of 89.5%.  Despite this increase, Humana reaffirmed its 2023 adjusted EPS guidance of “at least” $28.25 per share.  

On January 18, 2024, Humana preliminarily released its financial results for the fourth quarter and full year 2023, and shocked investors by revealing that its benefits expense ratio had increased to approximately 91.4% for the fourth quarter of 2023 and approximately 88% for the full year 2023.  As a result, the Company’s 2023 adjusted EPS were only $26.09 per share, or more than $2 per share less than what the Company had predicted in November 2023.  In response to this announcement, the price of Humana common stock fell $35.78 per share, or approximately 8%, from a close of $447.76 per share on January 17, 2024, to close at $411.98 per share on January 18, 2024. 

A week later, on January 25, 2024, Humana further shocked the market when it announced a loss for the fourth quarter of 2023, and stated that it expected the higher level of medical costs would persist for all of 2024.  As a result, Humana revealed that it expected 2024 adjusted EPS of only $16 per share (a $10 per share decrease from 2023 and well below analysts’ expectations of $29 per share).  In response to these revelations, the price of Humana common stock declined an additional $47.04 per share, or nearly 12%, from a close of $402.40 per share on January 24, 2024, to close at $355.36 per share on January 25, 2024. 

The Complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts, about the Company’s business and operations.  Specifically, Defendants downplayed pressures on the Company’s adjusted EPS resulting from increased medical costs associated with pent-up demand for healthcare procedures (especially as COVID concerns abated) which, contrary to the Company’s assurances, resulted in increased utilization rates and costs.

What is a Lead Plaintiff?

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.

Complete this form with your transactions in Humana Inc. securities between July 27, 2022, and January 24, 2024

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