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Humana Rallies on Upbeat Forecast as Medicare Advantage Losses Ease

Humana (HUM) delivered a dose of optimism to Wall Street this week, lifting its full-year forecast after reporting second-quarter results that beat expectations.

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The rebound comes as the company sees fewer Medicare Advantage departures than initially feared and continues to expand its CenterWell Primary Care network. Shares surged as investors welcomed signs of stabilization following months of turbulence.

Revenue Climbs as Earnings Outpace Estimates
In the second quarter, Humana posted revenue of $32.4 billion, marking a nearly 10% increase from the same period last year. Adjusted earnings per share came in at $6.27, beating the consensus forecast of $5.92. The company attributed the stronger-than-expected performance to growth in its CenterWell division and improved Medicare Advantage membership figures.

Humana’s insurance segment recorded a medical-cost ratio of 89.9%, meaning about 90 cents of every premium dollar was paid out in medical claims—right in line with Wall Street expectations.

Encouraged by the solid quarter, Humana raised its full-year adjusted EPS guidance to $17.00, up from its previous forecast of $16.25. The company now anticipates 2025 revenue of at least $128 billion, slightly above the earlier range of $126–$128 billion.

CenterWell Accelerates with Higher Patient Growth
Humana’s CenterWell division—a key part of the insurer’s strategic push into value-based senior care—played a central role in the earnings beat. Prescription volume and favorable drug mix helped drive revenue in the quarter, with executives noting that CenterWell's performance exceeded expectations.

The company now expects CenterWell Primary Care to add between 50,000 and 70,000 net new patients in 2025, up from previous guidance of 30,000 to 50,000. Recent investments in community-based senior centers, particularly in underserved areas, have positioned the division for continued growth.

This emphasis on primary care aligns with Humana's broader strategy of building a more integrated healthcare experience for seniors, a segment that continues to see high demand despite recent market challenges.

Medicare Advantage Declines Less Severe Than Feared
Humana has been under pressure over the past year as costs associated with Medicare Advantage—its core business—spiked following the pandemic, and regulatory scrutiny intensified. A steep downgrade in the quality rating of its largest Medicare Advantage plan last year weighed heavily on bonus payments and investor sentiment.

But second-quarter results offered a glimmer of relief. Humana said it now expects to lose 500,000 Medicare Advantage members this year, a reduction from its prior estimate of 550,000. So far, approximately 432,500 members have exited in 2025. The smaller-than-anticipated attrition helped lift investor confidence and prompted the improved outlook.

Despite a legal setback in challenging the Medicare Advantage star ratings downgrade, Humana continues to pursue litigation that could impact revenues in 2026. For now, the company says the fallout will likely be limited to next year’s results.

Conclusion
Humana’s second-quarter performance offers a much-needed turnaround narrative for a company that had seen its shares cut in half since late 2023. With improved guidance, easing Medicare losses, and rapid growth at CenterWell, the health insurer appears to be regaining its footing. While challenges remain, including a tough regulatory environment and lingering legal battles, investors are beginning to see a clearer path to recovery—and perhaps a return to long-term growth.


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