Humana Boosts Medicare Advantage Membership 2024 Forecast As Q1 Earnings Performance Exceeds Expectations

Wednesday, Humana Inc HUM posted first-quarter adjusted EPS of $7.23, down from $9.38 a year ago, beating the consensus of $6.12.

The company reported revenues of 29.33 billion, up from $25.65 billion, beating the consensus of $28.47 billion.

The revenues increased on higher per-member Medicare premiums and individual and group Medicare Advantage membership growth.

Humana’s stock has suffered after the company reported a surprising fourth-quarter loss and higher-than-expected medical costs from its Medicare Advantage business. Wednesday’s report was more positive.

Humana ended the first quarter with 6.1 million in Medicare Advantage membership, up from 5.67 million in the first quarter of 2023. 

In prepared remarks, the management said the first quarter benefit ratio of 88.9% is in line with expectations as we have taken a more conservative approach to quarter-end reserving considering the Change Healthcare disruption, although certain key individual Medicare Advantage (MA) early indicators are largely in line to slightly positive expectations.

Humana boasted 16.17 million medical members at the end of the first quarter.

Guidance: Based on its performance, the company reaffirmed its 2024 adjusted earnings guidance of $16 per share versus the consensus of $16.36. 

It is also anticipating a benefits ratio of 90% amid a spike in utilization in the Medicare Advantage (MA) program that dragged its finances in the fourth quarter.

Humana said it raised its individual Medicare Advantage annual membership growth by 50,000 to anticipate an annual growth of approximately 150,000, or 2.8%.

Also Read: See How Florida’s Much Awaited Medicaid Re-Procurement Awards Impact Centene, Humana, Molina.

Price Action: HUM shares are down 3.68% at $315.86 at the last check Wednesday. The stock was up after earnings by as much as 3.75% in the premarket session.

Photo via Wikimedia Commons