Humana beats quarterly profit estimates on strength in Medicare business
(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.
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".
The company said it also benefited from strength in its primary care segment CenterWell.
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.
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. Shares were down 1.5% in choppy premarket trading on Wednesday.
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.
The Louisville, Kentucky-based company expects its adjusted profit for next year to be "at least in-line with final 2024 results".
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 reported a profit of $4.16 per share, higher than the average analyst estimate of $3.40, according to data polled by LSEG.
The company reported a quarterly adjusted revenue of $29.3 billion, beating estimates of $28.67 billion.
Source: Investing.com