HUM Investor Alert: Kessler Topaz Meltzer & Check, LLP Files a Securities Fraud Class Action Lawsuit Against Humana Inc. and Encourages Investors With Losses to Contact the Firm

Published 7 months ago via Business Wire

The law firm of Kessler Topaz Meltzer & Check, LLP informs investors that the firm has filed a securities fraud class action lawsuit against Humana Inc. (NYSE: HUM) (“Humana” or the “Company”) on behalf of investors who purchased or acquired Humana common stock between July 27, 2022, and January 24, 2024, inclusive (the “Class Period”). This action, captioned Iron Workers Local 401 Annuity Fund v. Humana Inc., et al., Case No. 1:24-cv-00655-UNA, was filed in the United States District Court for the District of Delaware.

Important Deadline Reminder: Investors who purchased or otherwise acquired Humana common stock during the Class Period may, no later than August 2, 2024, move the Court to serve as lead plaintiff for the class.

If you suffered Humana losses, you may CLICK HERE or go to: https://www.ktmc.com/new-cases/humana-inc?utm_source=PR&utm_medium=link&utm_campaign=hum&mktm=r

You can also contact attorney Jonathan Naji, Esq. of Kessler Topaz by calling (484) 270-1453 or by email at info@ktmc.com.

DEFENDANTS’ MISCONDUCT

Humana is a health insurance company that provides medical benefit plans to approximately 17 million members. The Class Period begins on July 27, 2022, when Humana announced its second quarter 2022 financial results. Therein, 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.

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.

Thereafter, Humana made several additional disclosures about its profitability and financial condition, however, Defendants continued to downplay 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.

On January 18, 2024, Humana shocked investors when it preliminarily released its financial results for the fourth quarter and full year 2023 and revealed 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.

Finally, 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.

WHAT CAN I DO?

Humana investors may, no later than August 2, 2024, move the Court to serve as lead plaintiff for the class, through Kessler Topaz Meltzer & Check, LLP or other counsel, or may choose to do nothing and remain an absent class member. Kessler Topaz Meltzer & Check, LLP encourages Humana investors who have suffered significant losses to contact the firm directly to acquire more information.

CLICK HERE to sign up for the case or GO TO: https://www.ktmc.com/new-cases/humana-inc?utm_source=PR&utm_medium=link&utm_campaign=hum&mktm=r

WHO CAN BE A LEAD PLAINTIFF?

A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation. The lead plaintiff is usually the investor or small group of investors who have the largest financial interest and who are also adequate and typical of the proposed class of investors. The lead plaintiff selects counsel to represent the lead plaintiff and the class and these attorneys, if approved by the court, are lead or class counsel. Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff.

ABOUT KESSLER TOPAZ MELTZER & CHECK, LLP

Kessler Topaz Meltzer & Check, LLP prosecutes class actions in state and federal courts throughout the country and around the world. The firm has developed a global reputation for excellence and has recovered billions of dollars for victims of fraud and other corporate misconduct. All of our work is driven by a common goal: to protect investors, consumers, employees and others from fraud, abuse, misconduct and negligence by businesses and fiduciaries. For more information about Kessler Topaz Meltzer & Check, LLP please visit www.ktmc.com.

May be considered attorney advertising in certain jurisdictions. Past results do not guarantee future outcomes.

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