Humana Accused of Illegally Halting Payments for Eligible Retirees: Medicare Advantage Lawsuit Escalates AI Denials
Health insurance giant Humana faces explosive allegations in a class-action lawsuit claiming it illegally deploys AI to slash payments for critical rehabilitation care owed to Medicare Advantage retirees. As America’s senior population swells, this case spotlights how algorithms may be costing vulnerable elders their rightful benefits—and taxpayers billions in fallout.
The Lawsuit’s Core Claims: AI Overriding Doctors’ Orders
A federal class-action suit filed December 12, 2023, in the U.S. District Court for the Western District of Kentucky accuses Humana of using its proprietary AI tool, nH Predict, to systematically deny or prematurely terminate post-acute care for seriously ill Medicare Advantage (MA) patients. Plaintiffs, including elderly beneficiaries recovering from strokes, heart attacks, and fractures, argue the algorithm overrides physicians’ judgments, flagging patients as “stable” after just days in rehab—despite medical needs extending weeks or months.
The suit labels this a “fraudulent scheme,” alleging Humana banks on low appeal rates (just 0.2% of denials) to pocket premiums without footing care costs. Victims reportedly drain savings, forgo treatment, or suffer setbacks, all while Humana touts its “human side of healthcare.” Lead plaintiff Marijane Mangan, 73, claims her rehab was cut after a fall, forcing her home prematurely.
As of September 2025, the case advances amid discovery, with plaintiffs seeking damages and an injunction against the AI’s use.
Background: Humana’s Medicare Empire and AI’s Rising Role
Humana, the fourth-largest U.S. health insurer with $106 billion in 2024 revenue, dominates MA plans—privatized Medicare options covering 32 million seniors. These plans promise extras like dental but face scrutiny for overbilling and skimping on care.
nH Predict, acquired via Humana’s 2021 purchase of naviHealth for $2.1 billion, predicts discharge readiness using data like vitals and diagnoses. While pitched as efficiency-boosting, critics say it errs toward denials, echoing scandals at peers like UnitedHealth and Cigna. A 2024 Senate probe revealed MA denials hit 13%—double traditional Medicare’s—often via algorithms.
This suit follows a May 2025 DOJ complaint accusing Humana, Aetna, and Elevance of $100 million+ in kickbacks to brokers for enrolling healthier seniors, while shunning disabled ones as “less profitable.” That qui tam case, filed in Boston, alleges False Claims Act violations from 2016-2021.
Expert Views and Public Backlash: A ‘Windfall’ for Insurers?
Legal experts hail the suit as a watershed. “This exposes AI’s black-box dangers in high-stakes decisions,” says consumer advocate attorney Thomas H. Busey, who notes similar cases against UnitedHealth advanced in 2025 despite partial dismissals. Health policy analyst Juliette Cubanski of KFF warns algorithms prioritize profits over patients, urging CMS oversight.
Public fury boils on social media. X users blast Humana with #MedicareScam, one viral post reading: “My grandma died waiting for rehab Humana denied—AI isn’t God!” AARP rallied behind plaintiffs, citing surveys where 40% of MA enrollees faced improper denials. Humana counters that nH Predict aligns with CMS guidelines and appeals succeed 80% when pursued, but plaintiffs call this a “tiny fraction” trap.
Ripples for U.S. Seniors: From Wallets to Well-Being
This scandal strikes at America’s 65 million Medicare recipients, where MA plans now cover over half—up from 13 million in 2009. Illicit denials exacerbate elder poverty, with out-of-pocket rehab costs averaging $10,000 monthly, forcing 25% of seniors to skip care.
Economically, it inflates taxpayer burdens: MA overpayments topped $12 billion in 2024 per MedPAC, partly from denied-yet-needed services. Lifestyle hits include prolonged hospital stays or family caregiving strains, echoing broader caregiver burnout affecting 53 million Americans. Politically, it fuels Biden-era CMS crackdowns and 2026 election fights over privatization. Technologically, it spotlights AI ethics, spurring regs like the 2025 Algorithmic Accountability Act.
For retirees, it’s a wake-up: Review denials promptly—success rates soar with appeals.
Justice on the Horizon: A Reckoning for AI in Healthcare?
Humana’s alleged illegal payment halts via AI for eligible retirees underscore a profit-driven betrayal in Medicare Advantage, robbing seniors of vital rehab while enriching insurers. As this lawsuit—and the DOJ kickback probe—progress, expect stricter CMS audits and potential billions in settlements. For U.S. elders and families, victory could restore trust in privatized care; failure risks deeper divides in an aging nation’s health safety net. Watch the courts—your benefits may hang in the balance.