Humana’s Medicare Advantage and Cost-Cuts Moves Boost Results

Takeaways

• Humana surpassed first-quarter sales and profit estimates by reducing costs and terminating some Medicare Advantage plans.
• The insurer posted a membership decline, which is said was mostly because it pulled out of what it called "unprofitable" Medicare Advantage plans and counties.
• Humana reduced the ratio between what it paid out in claims and premiums.

Humana (HUM), the health insurer, reported better than expected results. It also lowered costs and withdrawn from certain Medicare Advantage plans.

Visible Alpha surveyed analysts and found that Humana’s adjusted earnings per share for the first quarter was $11.58, which is significantly higher than the $10.05 average estimate. Revenue increased by 8% to $32.11 Billion, also exceeding expectations.

The company stated that its year-to date membership decreased 446,000, which is in line with expectations. It noted that the losses were "largely driven by our decision to exit certain unprofitable plans and counties, which impacted approximately 560,000 members."

Humana said that the insurance segment benefit rate, which measures what an insurer pays out in claims in comparison to premiums, had dropped to 87.4%, from 89.3%. This was in line with their previous expectations. 

Humana has affirmed its full year adjusted EPS forecast of approximately $16.25, while lowering its GAAP EPS to about $14.68, from roughly $15.88. 

Including today's slight gains, shares of Humana are up 2.5% for 2025.