Humana Cuts Outlook Again on Lower Medicare Ratings

By Connor Hart

Humana cut its earnings outlook for the year, as the company continues to face earnings headwinds from lower Medicare Advantage Star Ratings for 2026.

The health insurer now expects earnings of at least $6.52 a share for the year, down from a previous forecast of at least $8.36 a share. On an adjusted basis, it maintained its guidance for earnings of at least $9 a share.

Humana previously said that it expects earnings to decline in 2026 due to the lower Medicare Advantage Star Ratings it had received for the year. The quality ratings, on a scale of one to five stars, are tied to bonuses paid to insurers.

For the year, Humana continues to expect individual Medicare Advantage membership growth of about 25%, driven by new sales, improved retention and changes to its customer service approach.

Shares fell 9% to $353.80 in premarket trading.

Health insurers' profits have been pressured by higher medical costs, driven by a range of factors including more utilization of medical services and higher costs of pharmaceuticals. Older people in particular have been using medical services to a greater extent, which increases costs for Humana more so than for other insurers, given its reliance on Medicare Advantage plans.

For the second quarter, Humana posted a profit of $694 million, or $5.73 a share, compared with $545 million, or $4.51 a share, a year earlier.

Stripping out one-time costs, earnings came in at $7.61 a share. Analysts polled by FactSet expected adjusted earnings of $7.26 a share.

Total revenue jumped 26% to $40.87 billion, ahead of Wall Street models of $40.57 billion.

The company's benefit ratio, which measures the proportion of premium revenue paid out to cover medical costs, was 91.2%, roughly in line with analysts' views.

Write to Connor Hart at connor.hart@wsj.com

(END) Dow Jones Newswires

July 29, 2026 06:31 ET (10:31 GMT)