UPDATED: Nov. 5 at 11:15 a.m.
Humana's top brass offered a deeper look at how the company is aiming to improve its performance in Medicare Advantage's star ratings.
CEO Jim Rechtin said the insurer was "disappointed but not surprised" by the results in the latest cycle of star ratings scores, which showed that 20% of its members are in plans with at least four stars. By comparison, 25% of Humana members were in four-star or better plans last year.
The Centers for Medicare & Medicaid Services have made significant adjustments to the methodology behind the star ratings, which have broadly change scores across payers. Multiple insurers have challenged these changes in court, to mixed success.
Rechtin said that in the current measurement year, which would be included in the calculations for bonus payments in 2028, the team is seeing "meaningful" improvements across multiple types of measures, representing the vast majority of areas.
He said that Humana has seen momentum on up through October, and the team has closed 600,000 more gaps compared to last year.
"The takeaway remains that we continue to be confident that we are on the right track to return to top quartile STARS results in bonus year 2028," Rechtin said.
He added that improvement efforts this year are focused on key HEDIS metrics and patient safety scores. In the early part of next year, the team at Humana will also be digging further into improvements around CAPHS as well as the Health Outcomes Survey.
"Right now, based on the things that we can control this year, it’s been broad, improved performance that makes us feel good about our overall trajectory," Rechtin said.
Humana is adjusting its expected membership losses for 2025 based on better-than-expected sales and retention for its Medicare Advantage (MA) plans.
The insurer previously estimated that it would lose as many as 500,000 members but now anticipates membership losses to land at approximately 425,000. Medicare's annual enrollment period is currently underway, ending Dec. 7.
Pressures in the MA market have dinged insurers nationwide, and Humana has taken steps over the past several months to adapt to those challenges, including elevated utilization and fluctuations in star ratings performance.
That said, Humana did reaffirm its medical loss ratio expectations for the year, anticipating between 90.1% and 90.5% amid the ongoing utilization spike.
“Our strategy of putting the consumer at the heart of everything we do is working, with solid year to date performance and strong momentum heading into the Annual Election Period,” said Humana President and CEO Jim Rechtin. “We feel positive about the direction we’re headed and the value we are creating for our members, patients and investors.”
Humana reported third-quarter profit of $195 million, down significantly year over year from the third quarter of 2024's $480 million haul. Humana's profits through three quarters are up, however, with the company reporting just shy of $2 billion through the first nine months of 2025.
By comparison, Humana reported $1.9 billion through the first nine months of 2024.
The earnings results surpassed Wall Street's expectations, per Zacks Investment Research. Humana also beat the Street with $32.2 billion in revenue for the third quarter. The company posted $28.7 billion in revenue for the third quarter of 2024.
Revenues through the first three quarters of this year were $93.6 billion, up from the $85.4 billion reported through the first nine months of 2024.
Based on these results, Humana confirmed it expects $17 in earnings per share for the full year.
The bulk of the company's revenue, or about $31.2 billion, came from the insurance division. Humana attributed its medical loss ratio performance in part to growth in state-based and Part D contracts, which generally come with a higher ratio, in tandem with declines in enrollment in MA.
Revenues at CenterWell, meanwhile, were $5.9 billion, according to the earnings report. The company said this was backed by growth at its pharmacy services and primary care businesses.
Humana said CenterWell has added 56,600 patients since December, growth of 15%. Growth at CenterWell Pharmacy, particularly in the specialty as well as direct-to-consumer business lines, exceeded prior expectations, the company said.
The company's shares were down premarket following the results, per Yahoo Finance.