Humana Raises Profit Floor on Lower Costs

Humana (NYSE: HUM), the US health insurer and one of the largest Medicare Advantage providers, raised its 2026 adjusted earnings guidance to at least $9.50 a share from at least $9.00 today. Medicare Advantage means privately run Medicare plans for over-65s. Analysts had expected about $9.15, according to LSEG.

Humana’s shares closed at $411.79 yesterday. In pre-market trading, a thin print of $409.35 at 1.55pm put them 0.59% lower, an indicative figure before the US open. Yesterday’s close was 5.0% below the $433.50 close of the 12th of October, the peak since early August.

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The quarter’s standout was cost. Humana’s third-quarter insurance benefit ratio, the share of premiums spent on care, was 93.7%. Management had guided to slightly above 94 percent, and LSEG’s analyst consensus was 94.39%. Humana said medical and pharmacy cost trends were in line to better than expected.

Jim Rechtin, Humana’s president and chief executive, said in the results release:

We are also increasingly driving financial and operating performance toward being ‘ahead’ of our plan.

Jim Rechtin, Humana

The quarter was still a loss. Adjusted earnings were -$0.70 a share, against a profit of $3.24 a year earlier, though analysts had expected a loss of about $1.00, according to LSEG. The insurance segment’s operating cost ratio improved to 7.7% from 9.0%, and the new full-year floor remains well below the $17.14 earned in 2025.

Growth is continuing while rivals pull back from Medicare Advantage. Humana’s individual Medicare Advantage membership is up 23% so far this year, tracking the roughly 25% growth it expected for 2026. UnitedHealth, Centene, Elevance and Cigna had all beaten consensus for the quarter before Humana reported.

The benefit ratio is still above the 91.1% of the third quarter of 2025, so costs have improved against plan rather than against last year.