Humana released second-quarter financial results that surpassed analyst expectations, driven by solid performance across its insurance operations and CenterWell healthcare services division. The health insurer reported net income of $694 million, or $5.73 per share, compared with $545 million, or $4.51 per share, in the prior-year period. On an adjusted basis excluding amortization and impairment charges, the company earned $7.61 per share. Revenue increased to $40.87 billion from $32.39 billion in the same quarter a year earlier, with both the insurer and CenterWell unit exceeding analyst sales estimates.
Medical spending remained in line with the company’s expectations across both new and existing members. The medical benefit ratio, which measures total medical expenses paid relative to premiums collected, reached 91.2% for the quarter—matching analyst forecasts and the company’s internal projections. CFO Celeste Mellet noted that the insurer saw slight favorability in inpatient medical costs, particularly among members receiving care from value-based providers. She attributed the performance to a combination of stabilizing medical cost trends and company actions aimed at improving member health outcomes.
Despite the earnings beat, Humana maintained its 2026 adjusted profit outlook of at least $9 per share, a decision that drew criticism from some analysts. Cantor Fitzgerald called the unchanged guidance a disappointment, particularly as other Medicare Advantage insurers have recently raised their outlooks following stronger cost management. The company’s stock declined more than 6% in afternoon trading following the announcement.
Looking ahead, Mellet characterized medical cost expectations for the following year as fairly consistent with 2026, noting that the company views medical costs as more stable at this point. However, pharmacy costs remain elevated due to drug prices and new medicine launches, with the company anticipating pharmacy medical cost trends to increase slightly in the following year compared with 2026. Mellet emphasized this reflects broader drug pricing dynamics rather than changes in member demand. The company expects modifications to its Medicare Advantage plans to support profitability improvement and position the insurer to achieve a sustainable pretax margin of at least 3% by 2028.
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