Humana Raises Earnings Outlook as Medical Costs Ease

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Forecast Raised on Favorable Cost Environment

Nov 6 (Reuters) – Humana raised its full-year profit forecast on Friday, citing ongoing control over medical expenses throughout the year.

The company now expects annual adjusted earnings of at least $9.50 per share, up from its prior projection of at least $9 per share. Analyst estimates for 2026 adjusted profit averaged $9.15 per share.

Medicare Advantage Growth Defies Industry Pullback

Humana, one of the largest providers of Medicare Advantage plans serving older adults and individuals with disabilities, is continuing to grow enrollment in these products despite a sector-wide pullback. This expansion comes as many competitors are scaling back their exposure to Medicare Advantage.

Once a significant driver of profit growth for health insurers, Medicare Advantage has faced mounting pressure over the past three years from higher medical expenses and tighter reimbursement rates. Humana, however, is maintaining its growth strategy.

The company reported that individual Medicare Advantage membership increased 23% year to date through the third quarter. This trajectory is consistent with its expectation of about 25% membership growth through 2026.

Medical Costs and Utilization Trends

In its insurance segment, Humana posted a quarterly medical cost ratio of 93.7%. This ratio – which measures the share of premium revenue used to pay for medical care – came in below analysts’ expectation of 94.39%, according to data compiled by LSEG.

Humana said that medical and pharmacy cost trends are performing in line with, or better than, its internal forecasts across both new and existing members.

Management Commentary

CEO Jim Rechtin emphasized the company’s operational and financial progress, stating: “Humana is delivering positive results for our members, our patients and their health,” and, “We are also increasingly driving financial and operating performance toward being ‘ahead’ of our plan.”

Quarterly Earnings Performance

On an adjusted basis, Humana reported a quarterly loss of 70 cents per share. This result was narrower than analysts’ expectation of a $1 per share loss.

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