Humana Boosts Outlook on Lower-Than-Expected Medicare Advantage Membership Drop

Cheng Xin / Getty Images The health insurance provider sees a bigger gain in patient growth at its CenterWell Primary Care centers — Cheng Xin / Getty Images

The health insurance provider sees a bigger gain in patient growth at its CenterWell Primary Care centers

Humana raised its full-year outlook as it anticipates a smaller decline in Medicare Advantage membership than originally expected.
The health insurance provider also sees a bigger gain in patient growth at its CenterWell Primary Care centers.
Humana beat second-quarter earnings and revenue estimates.

Humana (HUM) shares took off Wednesday when the health insurer boosted its guidance as it sees fewer losses of Medicare Advantage customers than previously thought.

The company now anticipates full-year adjusted earnings per share (EPS) of about $17.00, up from its previous outlook of approximately $16.25. It expects revenue to be at least $128 billion, versus the earlier forecast of $126 billion to $128 billion. Humana estimated Medicare Advantage membership will drop as many as 500,000 members, lower than its former prediction of approximately 550,000.

In addition, it sees its CenterWell Primary Care medical treatment centers for senior citizens to have a net patient growth of 50,000 to 70,000. Its prior guidance was for an increase of 30,000 to 50,000.

The company also reported second-quarter profit and sales that exceeded analysts’ expectations, with adjusted EPS of $6.27, and revenue nearly 10% higher year-over-year to $32.39 billion.

Humana credited the results to outperformance at CenterWell on higher-than-anticipated prescription volumes and favorable drug mix, as well as higher insurance revenue as Medicare Advantage membership came in above expectations.

Despite today’s 5% gains, shares of Humana remain slightly lower year-to-date.