Prime Highlights
- Humana beat second-quarter earnings and revenue estimates while maintaining its 2026 profit outlook.
- The company expects Medicare Advantage plan changes to support long-term profitability.
Key Facts
- Humana is one of the largest Medicare Advantage insurers in the US.
- Adjusted earnings reached $7.61 per share on $40.87 billion in revenue.
Background
Humana reported stronger-than-expected second-quarter results, with medical spending remaining in line with its forecasts. The health insurer also kept its adjusted profit outlook for 2026 unchanged at at least $9 per share, despite better quarterly earnings.
The company topped Wall Street projections of $7.22 per share and $40.61 billion in revenue with adjusted earnings of $7.61 per share on revenue of $40.87 billion. Net income rose to $694 million from $545 million a year earlier, while revenue increased from $32.39 billion.
Chief Financial Officer Celeste Mellet said steady performance across Humana’s insurance business and CenterWell healthcare services unit supported the results. She said medical and pharmacy costs remained in line with expectations, while inpatient medical expenses showed slight improvement, especially among members receiving value-based care.
Humana’s medical benefit ratio, which measures medical expenses against premium income, was 91.2% in the quarter, matching analyst expectations. Although slightly higher than last year’s 89.9%, the company said medical costs have become more stable.
Despite the earnings beat, Humana shares fell more than 6% after analysts noted the company did not raise its full-year outlook. Some investors had expected stronger guidance as several Medicare Advantage insurers recently increased their forecasts after gaining better control over medical costs.
Humana said pharmacy costs remain high due to rising drug prices and new medicines, while medical cost trends are expected to remain stable. The firm continues to concentrate on increasing membership, enhancing plan quality, upholding pricing discipline, and keeping expenses under control while anticipating modifications to its 2027 Medicare Advantage programs to increase profitability. By 2028, it hopes to have a sustainable pretax margin of at least 3%.
