Humana Raises Full-Year Profit Forecast on Lower Medical Costs

Humana Inc. raised its full-year 2026 profit forecast after reporting lower-than-expected medical costs in the third quarter.

Profit Forecast and Quarterly Results

The company now expects annual adjusted profit of at least $9.50 per share, up from its previous forecast of at least $9 per share. Analysts on average expected 2026 profit of $9.15 per share.

On an adjusted basis, Humana reported a quarterly loss of 70 cents per share, compared with analysts' estimate of a $1 per share loss.

Medical Costs and Membership

Humana reported a quarterly medical cost ratio of 93.7% in its insurance segment, lower than analysts' expectation of 94.39%, according to data compiled by LSEG. The company said medical and pharmacy cost trends are in line to better than its expectations across new as well as existing membership.

Individual Medicare Advantage membership increased 23% year to date through the third quarter, tracking the company's expectation of about 25% membership growth through 2026.

CEO Jim Rechtin said: "Humana is delivering positive results for our members, our patients and their health." He added: "We are also increasingly driving financial and operating performance toward being 'ahead' of our plan."

Industry Context

Humana, one of the largest providers of Medicare Advantage plans for older adults and people with disabilities, is expanding enrollment amid a broader retreat by rivals. Medicare Advantage plans have been under pressure from rising medical costs for three years along with tighter reimbursement rates.

Why it matters

The forecast increase signals that Humana is managing medical cost pressures more effectively than many competitors, even as the broader Medicare Advantage industry faces rising expenses and tighter reimbursement rates.

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Sources

• in.investing.com: Humana beats estimates on earnings and revenue, raises guidance By Investing.com
• aol.com: Humana raises full-year profit forecast on lower medical costs - AOL
• tradingpedia.com: Humana Raises Earnings Outlook as Medical Costs Ease
• tradersunion.com: Humana raises full-year profit forecast as medical costs stay lower
• finance.yahoo.com: Humana raises full-year profit forecast on lower medical costs

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.