UPDATED: Feb. 11 at 12:30 p.m. ET
Humana CEO Jim Rechtin acknowledged the noise around the latest Medicare Advantage rate notice and said that while the flat proposal is a concern, the company will continue to push forward on its performance improvements.
He said that part of the challenge for policymakers, regardless of political alignment, is managing the program as it "sits at the intersection of U.S. fiscal pressures and a program that is incredibly popular with seniors."
"Every administration wrestles with how to balance these two forces," Rechtin said.
"We are committed to always protecting our consumers the best we can, and we are very aware that we must do that within the constraints of the annual funding environment," he continued. "If that funding environment cannot fully support our benefit structure, then we will adapt as we have in the past."
In late January, the Centers for Medicare & Medicaid Services issued its proposed Advance Notice for Medicare Advantage and Part D, where it pitched flat rates for the program in 2027. This move has garnered significant criticism in the insurance industry, with payers warning that keeping rates flat could drive market exits and benefit cuts.
Just yesterday, CVS Health CEO David Joyner called the rate notice "disappointing" and said it failed to account for the current pressures on the market around cost and utilization. CVS owns the third-largest insurer in MA, Aetna, while Humana is the second-largest player.
Rechtin echoed the sentiment that CMS' proposal falls short of the cost environment.
"I think everybody is well aware that the advance rate notice came in below medical cost trend," he said. "Like, that's not new at this point."
He said that the Humana team will engage with CMS around the rate notice and work to make clear why the funding levels should be adjusted to support the beneficiaries' care journeys. But if things don't change, he said the insurer is positioned to adjust to that scenario.
"We recognize the pressures that are constantly being balanced here," Rechtin said. "Wherever we end up at the end of the day, we will adjust to that. And between now and then, we're gonna do everything we can to advocate for our members."
PUBLISHED: Feb. 11 at 7:45 a.m. ET
Humana reported a $796 million loss in the fourth quarter of 2025, with its losses growing year over year as increased utilization continues to drag Medicare Advantage (MA) plans.
By comparison, Humana reported a $693 billion loss in the fourth quarter of 2024. The company did post a profit for the full year of $1.2 billion, flat from the company's $1.2 billion haul in 2024.
Humana's medical loss ratio (MLR) in the fourth quarter was 93.1%, up slightly from the prior-year quarter's 92.1% rate. Across all of 2025, the MLR was 90.4%, the same as 2024 and falling within the company's guidance window of 90.1% to 90.5%.
The insurer attributed the ongoing MLR trends to a rise in its Part D enrollment alongside a decline in its MA membership, as Part D carries a higher MLR by design. It also reflects investments that the company has made to improve outcomes and to "support operational excellence."
Humana said its MA plan exits and its adjustments to benefit designs, as well as some favorable 2025 cost tailwinds, helped partially offset the factors dragging its MLR.
Revenues in the fourth quarter were $32.5 billion, up from $29.2 billion in the fourth quarter of 2024. The company's full-year haul was $129.7 billion, increasing from 2024's $117.8 billion.
The fourth-quarter results surpassed analysts' predictions on both profit and revenue, per Zacks Investment Research.
“We were pleased with our solid financial performance and operational progress in 2025,” Humana CEO Jim Rechtin said in the press release
At the company's core insurance business, revenues were $31.3 billion for the quarter, up from $28.2 billion in the fourth quarter of 2024. Revenues for the full year also increased, rising from $113.8 billion in 2024 to $124.6 billion in 2025.
Humana said the revenue growth reflects higher Medicare premiums as well as growth in its state-based contracts and Part D, which was offset in part by its decision to leave certain MA markets and the resulting membership decline.
Humana said it had just shy of 15 million members as of Dec. 31, though that figure has risen as it received the results of Medicare's annual enrollment period. As of January, the company said it has close to 6.3 million individual MA members, adding 1 million, or about 20%, compared to the end of 2025 thanks to the annual enrollment period.
Revenue at its CenterWell division was also up year over year, according to the earnings report, growing from $5.1 billion in the fourth quarter of 2024 to $6 billion in the fourth quarter of 2025. Full-year revenue was $22.5 billion, up from 2024's $19.9 billion.
Humana said it expects at least $9 in earnings per share in 2026, a prediction that disappointed Wall Street, per Seeking Alpha. The guidance led the company's share price to drop premarket, down by about 4%.