Key Moments
- Humana projected 2026 adjusted earnings of at least $9 per share, below the $11.92 per-share estimate from analysts.
- The insurer expects about 25% year-over-year growth in 2026 individual Medicare Advantage membership, with roughly 45% of members in plans rated 4 stars or higher.
- Humana reported a medical cost ratio of 93% and an adjusted fourth-quarter loss of $3.96 per share, slightly better than the forecast loss of $4.01 per share.
Outlook Cut Triggers Share Pressure
Humana forecast annual profit below Wall Street expectations, citing anticipated weakness in quality ratings for its Medicare Advantage plans. The updated guidance drove a 7% decline in the health insurer’s shares in premarket trading.
The company indicated that lower quality scores on plans serving people aged 65 and older, as well as individuals with disabilities, are expected to weigh on financial performance in 2026. These plans account for the bulk of Humana’s revenue and are tied to bonus payments from the U.S. government, which could be reduced if ratings deteriorate.
Medicare Advantage Growth Versus Margin Pressure
“While not shocking that Humana’s 2026 earnings expectations are much lower… the big increase in membership looks likely to cut into margins further than the market was anticipating,” said Morningstar analyst Julie Utterback.
Humana projects that individual Medicare Advantage membership in 2026 will rise by about 25% from the prior year. The company also expects approximately 45% of its members to be enrolled in plans that carry ratings of 4 stars or higher.
Analysts noted that, even as some large competitors scale back in the Medicare Advantage segment, Humana’s enrollment growth outlook appears to be at the upper end of what investors had been expecting. However, the company acknowledged that rapid expansion brings profitability challenges because new enrollees tend to be less profitable than longer-tenured members and can increase medical costs.
2026 Guidance and Strategic Response
For 2026, Humana forecasts adjusted earnings of at least $9 per share. That compares with analysts’ estimates of $11.92 per share, based on data compiled by LSEG.
In its prepared commentary, the company stated that the initial 2026 guidance reflects an unusually high degree of caution, given what it described as a dynamic operating backdrop. Humana has been repricing its offerings and recalibrating benefits to support margins while working through ongoing cost pressures that have affected the sector for more than two years.
| Metric | Figure | Context |
|---|---|---|
| 2026 adjusted EPS guidance (at least) | $9 | Below analysts’ $11.92 estimate (LSEG) |
| Expected 2026 individual MA membership growth | About 25% | Year-over-year increase |
| Share of members in 4-star-and-above MA plans (2026) | About 45% | Impacts bonus payments tied to quality ratings |
| Quarterly medical cost ratio | 93% | Roughly in line with analysts’ expectations |
| Adjusted Q4 loss per share | $3.96 | Slightly better than the expected $4.01 loss |
Current Financial Performance
Humana reported a quarterly medical cost ratio – the share of premiums that goes toward medical care – of 93%, which the company described as roughly consistent with market expectations.
For the fourth quarter, Humana posted an adjusted loss of $3.96 per share. That result was marginally better than analysts’ forecast for a loss of $4.01 per share.
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