Humana anticipates expanding its Medicare Advantage enrollment in 2027, following encouraging early enrollment figures during the current sign-up period. Additionally, Humana is attracting more new enrollees than initially forecasted.
While it remains premature to estimate the exact scale of membership growth, any increase represents a significant shift from prior expectations that enrollment would remain stagnant or decline in 2027. This reversal comes after Humana reduced its available plans.
Medicare Advantage Enrollment
Medicare Advantage constitutes Humana’s primary membership source, representing 40% of its total members but generating 80% of its premium revenue. Approximately 600,000 seniors—comprising 8% of its 7.2 million MA enrollees—were impacted by plan exits.
Despite these disruptions, Humana maintained a more competitive benefit structure than rivals when restructuring its offerings for 2026. This strategy drew over 1 million new seniors to its plans, surprising investors who feared the influx could lead to higher spending than government reimbursements.
Profitability Initiatives
Though anticipated cost pressures failed to materialize, Humana’s first-half financial performance lagged behind competitors. While other insurers reported strong earnings growth in the first two quarters, Humana’s results aligned with expectations, with no guidance adjustments.
Continued enrollment growth may complicate Humana’s efforts to restore profit margins. Nevertheless, executives reiterated their expectation of higher Medicare Advantage profitability in 2027. Rechtin clarified that growth will be more moderate than in 2026 and not driven by overly generous plan designs.
Enrollment Trends
The stronger-than-expected performance stems from brokers more effectively directing seniors toward Humana’s plans after the company restructured its distribution network. CFO Celeste Mellet also suggested that exits by smaller insurers may be creating opportunities for larger players to gain members during this enrollment window.
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Several smaller Medicare Advantage providers, including Providence Health Plan, Memorial Hermann Health Plan, and Central Mass Health, are exiting the market for 2027, citing financial strain and regulatory challenges. Since Humana eliminated lower-margin plans, new enrollees should primarily join higher-profit offerings, according to Mellet.
While Humana declined to specify margin targets for 2027 due to enrollment uncertainties, the company remains on track to achieve meaningful margin improvement next year and meet its 2028 goal of a 3% Medicare Advantage margin, executives stated.
Performance Ratings
Humana’s prospects are further strengthened by a sharp improvement in its 2027 Medicare Advantage quality ratings, which will translate into financial incentives and competitive advantages in 2028. The proportion of members in 4-star or higher-rated plans surged from 41% in 2026 to 93% in 2027.
This achievement could yield billions in additional payments for Humana in 2028. Rechtin described the ratings as among the strongest in the company’s history. The insurer plans to reinvest the windfall into enhancing clinical outcomes and customer service while sharing some proceeds with shareholders.
Two years ago, Humana experienced a steep decline in ratings, which weighed on earnings in 2025 and 2026. However, the company has since made substantial progress in reversing that downturn, as demonstrated by the improved quality scores.
For the quarter, Humana reported earnings of $162 million on revenue of $41.2 billion, reflecting a 17% year-over-year profit decline despite 26% revenue growth. The insurer raised its 2026 outlook for the first time this year, now projecting adjusted earnings per share of at least $9.50, up from its prior target of $9. Additionally, non-adjusted earnings per share expectations more than doubled to at least $15.09 from $6.52.
