Humana reports strong first quarter earnings as Medicare Advantage costs hit the mark
Humana (HUM) reported first quarter earnings that topped Wall Street expectations Wednesday, helping drive shares 5% higher in pre-market trading.
The healthcare company beat on adjusted earnings per share of $11.58, compared to Wall Street's estimates of $10.09. Revenue came in at a slight miss of $32.11 billion, just under the consensus of $32.15 billion.
Humana results stayed in line with its own expectations, and it reaffirmed its full-year guidance. The company expects its medical loss ratio — the ratio of premiums taken in versus paid out — to be between 90.1% to 90.5% for the year.
While that is on the higher side of the Affordable Care Act's required threshold of 85%, Humana said that it's confident in its pricing strategies and that the Medicare Advantage spend is in line with expectations.
"Medicare Advantage is performing as expected, and we are excited about our progress in expanding CenterWell and Medicaid,' Humana president and CEO Jim Rechtin said in a statement.
Humana is one of the larger Medicare Advantage providers, and its quarterly report has been on investors' watchlist after UnitedHealth Group's (UNH) earnings miss earlier this month, which was in part related to higher costs in its Medicare Advantage book than expected. That impacted Humana's stock as well, which sank more than 12% on April 17. It did not fully recover from that and was up only about 6% at the end of trading on Tuesday.
Humana has also faced other headwinds in its Medicare Advantage business, including losing the most star ratings among its peers this year. This means it will get lower revenue from Medicare payments and will likely see a loss of members as the plans' ratings go down.
Humana has about 18% of the Medicare Advantage market, while UnitedHealth boasts 29%. The third largest is CVS (CVS) at 12%, with its Medicare Advantage plans under Aetna. CVS reports earnings on May 1.
The company is focused on expanding CenterWell, its health services and mail-order pharmacy business unit. Humana said NovoCare, the online pharmacy for Novo Nordisk (NVO), was chosen as part of Novo's latest effort to dispense the blockbuster weight-loss drug Wegovy directly to cash-paying patients.
Anjalee Khemlani is the senior health reporter at Yahoo Finance, covering all things pharma, insurance, care services, digital health, PBMs, and health policy and politics. That includes GLP-1s, of course. Follow Anjalee as AnjKhem on social media platforms X, LinkedIn, and Bluesky @AnjKhem.
Click here for in-depth analysis of the latest health industry news and events impacting stock prices
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CBS News
9 minutes ago
- CBS News
Medicaid enrollees fear losing health coverage if Congress enacts work requirements
It took Crystal Strickland years to qualify for Medicaid, which she needs for a heart condition. Strickland, who's unable to work due to her condition, chafed when she learned that the U.S. House had passed a bill that would impose a work requirement for many able-bodied people to get health insurance coverage through the low-cost, government-run plan for lower-income people. "What sense does that make?" she asked. "What about the people who can't work but can't afford a doctor?" The measure is part of the version of President Donald Trump's "Big Beautiful" bill that cleared the House last month and is now up for consideration in the Senate. Trump is seeking to have it passed by July 4. The bill, as it stands, would cut taxes and government spending — and also upend portions of the nation's social safety net. For proponents, the ideas behind the work requirement are simple: Crack down on fraud and stand on the principle that taxpayer-provided health coverage isn't for those who can work but aren't. The measure includes exceptions for those who are under 19 or over 64, those with disabilities, pregnant women, main caregivers for young children, people recently released from prisons or jails, or during certain emergencies. It would apply only to adults who receive Medicaid through expansions that 40 states chose to undertake as part of the 2010 health insurance overhaul. Many details of how the changes would work would be developed later, leaving several unknowns and causing anxiety among recipients who worry that their illnesses might not be enough to exempt them. Advocates and sick and disabled enrollees worry, based largely on their experience, that even those who might be exempted from work requirements under the law could still lose benefits because of increased or hard-to-meet paperwork mandates. Strickland, a 44-year-old former server, cook, and construction worker who lives in Fairmont, North Carolina, said she could not afford to go to a doctor for years because she wasn't able to work. She finally received a letter this month saying she would receive Medicaid coverage, she said. "It's already kind of tough to get on Medicaid," said Strickland, who has lived in a tent and times and subsisted on nonperishable food thrown out by stores. "If they make it harder to get on, they're not going to be helping." Steve Furman is concerned that his 43-year-old son, who has autism, could lose coverage. The bill the House adopted would require Medicaid enrollees to show that they work, volunteer or go to school at least 80 hours a month to continue to qualify. A disability exception would likely apply to Furman's son, who previously worked in an eyeglasses plant in Illinois for 15 years despite behavioral issues that may have gotten him fired elsewhere. Furman said government bureaucracies are already impossible for his son to navigate, even with help. It took him a year to help get his son onto Arizona's Medicaid system when they moved to Scottsdale in 2022, and it took time to set up food benefits. But he and his wife, who are retired, say they don't have the means to support his son fully. "Should I expect the government to take care of him?" he asked. "I don't know, but I do expect them to have humanity." About 71 million adults are enrolled in Medicaid now. And most of them — around 92% — are working, caregiving, attending school or disabled. Earlier estimates of the budget bill from the Congressional Budget Office found that about 5 million people stand to lose coverage. A KFF tracking poll conducted in May found that the enrollees come from across the political spectrum. About one-fourth are Republicans; roughly one-third are Democrats. The poll found that about 7 in 10 adults are worried that federal spending reductions on Medicaid will lead to more uninsured people and would strain health care providers in their area. About half said they were worried reductions would hurt their ability or their family to get and pay for health care. Amaya Diana, an analyst at KFF, points to work requirements launched in Arkansas and Georgia as keeping people off Medicaid without increasing employment. Amber Bellazaire, a policy analyst at the Michigan League for Public Policy, said the process to verify that Medicaid enrollees meet the work requirements could be a key reason people would be denied or lose eligibility. "Massive coverage losses just due to an administrative burden rather than ineligibility is a significant concern," she said. One KFF poll respondent, Virginia Bell, a retiree in Starkville, Mississippi, said she's seen sick family members struggle to get onto Medicaid, including one who died recently without coverage. She said she doesn't mind a work requirement for those who are able, but worries about how that would be sorted out. "It's kind of hard to determine who needs it and who doesn't need it," she said. Lexy Mealing, 54 of Westbury, New York, who was first diagnosed with breast cancer in 2021 and underwent a double mastectomy and reconstruction surgeries, said she fears she may lose the medical benefits she has come to rely on, though people with "serious or complex" medical conditions could be granted exceptions. She now works about 15 hours a week in "gig" jobs but isn't sure she can work more as she deals with the physical and mental toll of the cancer. Mealing, who used to work as a medical receptionist in a pediatric neurosurgeon's office before her diagnosis and now volunteers for the American Cancer Society, went on Medicaid after going on short-term disability. "I can't even imagine going through treatments right now and surgeries and the uncertainty of just not being able to work and not having health insurance," she said. Felix White, who has Type I diabetes, first qualified for Medicaid after losing his job as a computer programmer several years ago. The Oreland, Pennsylvania, man has been looking for a job, but finds that at 61, it's hard to land one. Medicaid, meanwhile, pays for a continuous glucose monitor and insulin and funded foot surgeries last year, including one that kept him in the hospital for 12 days. "There's no way I could have afforded that," he said. "I would have lost my foot and probably died." ___ Associated Press writer Susan Haigh in Hartford, Connecticut, contributed to this article.
Yahoo
2 hours ago
- Yahoo
Special care changes needed as costs push patients away
High specialist medical costs cause almost two million Australians to delay or skip appointments, but a report suggests stripping public funding to doctors charging excessive fees could be part of the remedy. About 1.9 million Australians are delaying or skipping critical medical care due to exorbitant fees for specialist doctors, a report by public policy think tank the Grattan Institute has found. Some private specialist doctors charge patients two to three times more than the rate Medicare sets for those services, the report found. It said patients of one specialist forked out an average of $300 per year in 2023 - up 73 per cent since 2010. Average out-of-pocket costs for extreme-fee-charging specialists in 2023 reached $671 for psychiatry services and more than $350 for endocrinology, cardiology, paediatrics, immunology and neurology services. The high costs leave critical health care out of reach for millions, causing patients in poorer pockets of Australia to wait months or years for urgent appointments, and leading to missed diagnoses, avoidable pain and added pressure on hospitals. About four in 10 Australians visited a specialist in 2023/24. About two-thirds across all specialties are private appointments, with patients receiving a Medicare rebate and paying a gap fee. Grattan's Health Program director Peter Breadon said the system was broken from start to end. "Everywhere, from how the system is planned and how training is funded through to how we target public investment and integrate the system between primary care and specialist care, it all really needs a lot of change," he told AAP. Grattan's recommendations include scrapping Medicare subsidies to specialists who charge excessive fees and publicly naming them. "Hopefully it would discourage those specialists who are charging really unreasonable fees, but this is a problem that needs many solutions," Mr Breadon said. The report also recommends governments provide one million extra specialist appointment services every year in areas that receive the least care, a system in which GPs can get written advice from other specialists, modernise public specialist clinics, and allocate $160 million to expand specialist training for undersupplied specialties and rural training. Australian Medical Association President Danielle McMullen said public hospital underinvestment and lagging Medicare rebates made it harder for patients. "The risks of delaying medical care are that the health problem gets worse," she said, adding it also puts pressure on GPs and hospitals in public and private clinics. The doctors' association supports most of Grattan's recommendations, but said removing Medicare funding from specialists who charged excessive fees was not practical. As governments negotiate the National Health Reform agreement, Dr McMullen urged leaders to sort out longer-term funding for public hospitals and develop a health workforce data tracker to show where investment was needed. Federal Health Minister Mark Butler said private health insurers and specialists needed to do more to protect patients from exorbitant bills. He said the Albanese government would upgrade the Medical Costs Finder, which helps patients find the best value for specialist medical advice, and was committed to working with stakeholders to improve cost transparency.
The Hill
4 hours ago
- The Hill
How Kennedy's overhaul could make vaccines more expensive
Health and Human Services Secretary Robert F. Kennedy Jr.'s moves to upend decades of vaccine policy could hit patients hardest in their wallets, as shifting guidance over shots could make insurance coverage confusing and scattershot. For decades, the Centers for Disease Control and Prevention's (CDC) independent advisory panel recommended which shots Americans should get and when. The Affordable Care Act requires all insurance companies to cover, for free, all vaccines the panel recommends. Those recommendations also help states decide which shots should be mandated for schoolchildren. Kennedy's most recent move to purge the entire advisory panel and replace them with his own handpicked members, including several vocal vaccine critics, is throwing that process into doubt. 'If we have a system that has been dismantled — one that allowed for open, evidence-based decisionmaking and that supported transparent and clear dialogue about vaccines — and then we replace it with a process that's driven largely by one person's beliefs, that creates a system that cannot be trusted,' Helen Chu, a newly ousted member of the panel and professor of infectious disease at the University of Washington School of Medicine, said during a press conference. Vaccine prices vary, but without insurance, coronavirus vaccines can cost nearly $150, the MMR shot ranges from $95 to nearly $280, and the HPV vaccine can exceed $300, according to CDC data. Individual pharmacies could charge even more. Candace DeMatteis, policy director at the Partnership to Fight Infectious Disease, said she worries about creating a two-tiered system. 'Out of pocket costs for vaccines become an issue where we could end up with a system where some people can afford vaccinating themselves and their families and others cannot,' DeMatteis said. Prior to enactment of the Affordable Care Act, vaccine coverage varied significantly depending on the type of insurance a person had. If the CDC's Advisory Committee on Immunization Practices (ACIP) changes recommendations for existing vaccines or doesn't recommend new ones, maintaining access will be difficult. 'It's a seismic shift, if you will, away from facilitating access by removing coverage and cost barriers, to one where there's great uncertainty and coverage and cost issues become barriers,' DeMatteis said. It's not clear what the vetting process was for the eight people Kennedy appointed to the ACIP, or how prepared they will be for their first meeting, which is scheduled to occur in less than two weeks. According to a Federal Register notice, the panel is scheduled to vote on recommendations for COVID-19 vaccines as well as meningococcal, HPV, influenza, and RSV vaccines for adults and maternal and pediatric populations. Health experts said they have serious questions about what direction the new panel will take and whether Americans will still have access to free vaccines, including the coronavirus shot, in time for fall respiratory season. If the ACIP is no longer a reliable, independent authority on vaccines, it 'will be replaced by a patchwork of different policies by different states, and each state will have to make its own decisions,' Chu said. 'Washington state is a place where we have experts and scientists who work together. There are other states where this may not exist, or where they may not choose to recommend vaccines. So that is going to create a lot of chaos,' she added. Some state health officials have already begun taking steps in that direction. The Illinois Department of Health said on social media it will be convening its own vaccine advisory committee and national experts 'to ensure we continue to provide clear, science-backed vaccine guidance for our residents.' When Kennedy unilaterally changed the COVID-19 vaccine guidance earlier this month to remove recommendations for pregnant women and change the open recommendation for children, the Wisconsin Department of Health Services said it would continue to recommend the shots for every person at least 6 months old. 'The recent changes in CDC guidance were not made based on new data, evidence, or scientific or medical studies, nor was the guidance issued following normal processes,' the agency said in a statement. Tina Tan, president of the Infectious Diseases Society of America, said her organization as well as other major medical groups including the American Medical Association and the American Academy of Pediatrics Academy have been speaking with insurance companies to urge them to continue paying for shots, even if the panel changes recommendations. Tan mentioned an initiative launched in April by a group of public health experts called the Vaccine Integrity Project, which is working to create an alternative process to maintain vaccine access. The initiative is funded by a foundation backed by Walmart heiress Christy Walton and led by Michael Osterholm, director of the University of Minnesota's Center for Infectious Disease Research and Policy. Federal law is specific that insurance provisions are tied to the ACIP. Specialty organizations may have expertise to make their own recommendations, but they will still require the cooperation of insurance companies. States are also more limited, and they don't have the same power as the federal government to force coverage. 'I think it remains to be seen what the insurers are going to do,' Tan said. 'However, hopefully, with the discussions going on, they can get the insurers to understand that vaccines are extraordinarily safe and effective and are the best tool that we have to protect persons of all ages against serious vaccine preventable diseases.'
