Humana Raises Full-Year Profit Forecast with Medicare Gains

Humana Inc. surpassed Wall Street's third-quarter profit expectations thanks to higher-than-expected earnings from its Medicare Advantage insurance plans. The health insurance provider, which focuses on Medicare Advantage plans for older adults, raised its full-year adjusted profit forecast from the previous projection of "approximately $16.00 per share" to "at least $16.00 per share."

The company's Medicare Advantage segment significantly contributed to this quarter's success, even as the industry struggles with rising healthcare costs for older adults since late 2022. Insurers have been finding it challenging to navigate the Medicare Advantage landscape amid recent government payment rates and high utilization trends.

Based in Louisville, Kentucky, Humana also reported strong performance in its primary care segment, CenterWell. The insurer now expects its individual Medicare Advantage business to see a net increase of approximately 265,000 members for the year, up from a prior estimate of around 225,000 members.

In the third quarter, Humana's medical care ratio, which reflects the portion of premiums used for medical care, increased to 89.9% from 86.6% in the same quarter last year. This was slightly below analysts' expectations of 89.94%.

Humana's adjusted quarterly profit came in at $4.16 per share, surpassing the average analyst estimate of $3.40 according to an LSEG poll. Additionally, the company's adjusted revenue for the quarter was reported at $29.3 billion, exceeding the anticipated $28.67 billion.

NYSE:HUM demonstrated resilience in a challenging healthcare market, with Medicare Advantage plans delivering significant revenue and membership growth.