Humana took in $1.2 billion in profit in the first quarter of 2025, enough for the insurer to reaffirm its outlook for the year.
Revenue clocked in at about $32.1 billion for the quarter, while earnings per share were $11.58.
A 5% increase in Medicare Advantage payments has contributed to resilient stock for the company, according to Seeking Alpha, though analysts noted that long-term risk may come in the form of rising healthcare costs and regulatory changes, potentially affecting the business model's sustainability.
Membership is about 14.8 million members as of March 31 – down from 16.2 million in Q2 2024 – which Humana largely attributed to continued cost pressures in Medicare Advantage, leading the insurer to extricate itself from some low-performing markets.
That led to membership losses of about 446,000 for the quarter. Humana expects to lose about 500,000 MA members this year, but noted there's been growth in Medicaid and in standalone prescription drug plans.
WHAT'S THE IMPACT
The insurer said in prepared statements that it's enhancing its Medicaid platform, focusing largely on dual-eligibles.
Humana expects modest improvement in its Medicaid margin this year, noting that Illinois will be awarding the insurer a new Fully Integrated Dual Eligible (FIDE) Special Needs Plan (SNP), which is expected to start in 2026. The Illinois program includes a greenfield DSNP opportunity in a Humana MA market within more than 450,000 dual-eligibles.
The medical loss ratio (MLR) for the quarter was 87.4%, and the company expects the MLR for the year to land between 90.1% and 90.5%.
The CenterWell division saw revenues grow slightly to $5.1 billion, from $4.8 billion in Q1 2024, largely due to its senior-focused primary care business, the insurer said.
THE LARGER TREND
The Centers for Medicare and Medicaid Services rejected an appeal this month from Humana to improve the latter's Medicare Advantage star ratings, which could cost the insurer significant revenue in 2026.
The decision was the latest chapter in ongoing litigation between Humana and CMS. When the insurer filed suit in October 2024, it cited star ratings that were significantly lower than the year prior, and focused largely on cut points, the upper and lower thresholds for each measure. Cut points determine a plan's overall score, from 1 to 5 stars.
Cut points for several measures "moved abruptly and substantially upward, significantly depressing MAOs' Star Ratings, including Humana's," the lawsuit said. "Under the 2024 ratings, 94% of Humana's MA enrollees were in a plan with 4 stars or higher. As a result of the unexplained swings in the most recent cut points calculated by CMS, now only 25% of its enrollees are in plans rated 4 stars and above for 2025."
Also, CMS did not follow its own ground rules on decision-making and failed to provide needed data, the complaint said.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.