Jim Cramer on Humana: “This Is a Textbook Safety Stock”

Humana Inc. (NYSE:HUM) was among the stocks Jim Cramer highlighted during Mad Money, as he noted the rotation into defensive sectors. Cramer highlighted an “unexpected gift” for the company, as he remarked:

Then back to defense, Humana, the giant health insurer, got a… huge break from the Trump administration not that long ago when it lifted Medicare Advantage premiums, an unexpected gift for Humana. For 2027, those reimbursements look even better. This is a textbook safety stock.

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Humana Inc. (NYSE:HUM) provides several medical insurance plans and prescription drug programs along with its own network of primary care centers and home health services. Artisan Partners stated the following regarding Humana Inc. (NYSE:HUM) in its Q1 2026 investor letter:

Among the portfolio’s biggest decliners were Salesforce, Accenture, Humana Inc. (NYSE:HUM) and PayPal Holdings, each of which dropped by 20% or more during the quarter. Managed care stocks, including Humana, also declined during the quarter. The sector came under pressure after the Centers for Medicare & Medicaid Services (CMS) released a preliminary 2027 Medicare Advantage rate update that was significantly below expectations. The proposed increase of just 0.09% was essentially flat compared with investor expectations of 4% to 6%. While final rates are often revised higher, the announcement was a meaningful disappointment and adds uncertainty to Humana’s multiyear turnaround. More broadly, the managed care industry continues to face higher medical costs driven by elevated utilization. Humana is also dealing with lower quality ratings under the Medicare Stars program, which could reduce bonus payments over the next several years. Although the stock appears inexpensive following its recent decline, we chose to exit the position given the company’s heavy exposure to Medicare Advantage and the risk that policy and execution challenges could delay a recovery in margins and earnings.

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