Humana beats quarterly profit estimates on strength in Medicare and primary care segments

By Sriparna Roy

(Reuters) - Humana (NYSE:HUM ) beat Wall Street estimates for third-quarter profit on Wednesday as it added higher-than-anticipated members under its government-backed Medicare Advantage insurance business for older adults and strength in its primary care segment CenterWell.

The health insurer, a top provider of Medicare Advantage plans, said it expects "at least $16" in adjusted profit for the full year, compared to its previous forecast of "approximately $16.00".

For 2025, Humana expects adjusted profit to be "at least in-line with final 2024 results". Analysts expect a 2025 profit of $19.77, according to data compiled by LSEG.

Insurers providing MA plans have faced challenges recently due to rising healthcare expenses among older adults. These challenges were compounded by recent government payment rates, making it difficult for insurers to account for higher utilization trends.

Concerns about 2024 have been alleviated, but expectations for 2025 suggest a flat year with minimal growth, which is "a much lower bar than expected," said Baird analyst Michael Ha.

Shares of the Louisville, Kentucky-based company were down marginally before the markets opened on Wednesday.

Humana shares, among the most hardest hit, have fallen nearly 44% so far this year, after the company withdrew its 2025 forecast previously, citing disappointing government Medicare reimbursement rates.

A downgrade in the quality rating for a widely used Medicare insurance plan, which accounts for nearly half of its Medicare Advantage (MA) memberships, could potentially weigh on the insurer's revenue and bonus payments in 2026.

For the full year, Humana anticipates individual net membership growth in its MA business of about 265,000, up from its previous estimate of about 225,000.



Humana reported a third-quarter medical cost ratio - the percentage of premiums spent on medical care - of 89.9% in line with analyst expectations.

On an adjusted basis, Humana posted a adjusted profit of $4.16 per share, beating estimates of $3.40, and quarterly adjusted revenue of $29.3 billion, higher than estimates of $28.67 billion.

Source: Investing.com