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Humana, one of the biggest U.S. health insurers for older adults, said that the number of people in its Medicare Advantage plans will fall this year, but not as much as it had feared earlier. The company now expects a drop of about 425,000 members, compared to its previous forecast of up to 500,000. Humana said this smaller decline is because more customers are staying and new sales are stronger than expected.
However, even with better membership numbers, the company lowered its profit outlook due to higher medical costs. More people have been using healthcare services, which has pushed up spending.
Earlier, Humana shared that about 20% of its Medicare Advantage members—around 1.2 million people, are in plans rated 4 stars or higher for 2026. About 14% are in 4.5-star plans for next year, up from just 3% for 2025. These ratings matter because higher-rated plans get bigger bonus payments from the government.
But Humana recently lost a court case where it tried to challenge how its 2025 plan ratings were decided. This could hurt its bonus payments in the future. The company warned that if the lower ratings stand, its revenue, profits, and cash flow might take a big hit in 2026.
Humana’s medical cost ratio, which measures how much of its premium income goes to medical care, rose to 91.1% in the third quarter from 89.9% last year. That means it’s spending a larger share of its income on healthcare services. Despite that, the company’s adjusted earnings were $3.24 per share, beating forecasts. Revenue came in at $32.65 billion.
For the full year, Humana now expects earnings of about $12.26 per share, lower than its earlier estimate of around $13.77. It still expects adjusted earnings of roughly $17 per share.
After the announcement, Humana’s stock fell more than 3% in premarket trading on Wednesday.