Humana’s path forward: 5 things to know 

Humana’s five-year plan entails a transformation from a health services company to a consumer healthcare company, CEO Jim Rechtin told investors. 

The company held its annual investor day June 16. Mr. Rechtin said the company will expand its reach within its primary care and Medicaid businesses, and at its core, will remain an older adult care and Medicare Advantage-focused company. 

The Medicare Advantage industry has faced a turbulent 18 months, as rising medical costs pressure profit margins. Humana is also contending with a steep decline in its star ratings, which are expected to hurt 2026 earnings. 

There has been more doubt cast on Medicare Advantage’s attractiveness than at any point in the past 15 years, Mr. Rechtin said. 

“We do believe that this is not a past tense thing. Medicare Advantage remains an attractive sector, and it will for an extended period of time,” he said. 

Here are five things to know about Humana’s strategy: 

1. The company is focusing on clinical excellence more broadly, rather than on star ratings alone, Mr. Rechtin said.
   
   “[Clinical excellence] is what drives this business at the end of the day. That is going to be where we spend the greatest amount of energy and time. We need to do that with an efficient, tech-enabled backend that generates operating leverage.”
   
   
2. Humana is planning for “a worst case scenario” when it comes to its Medicare Advantage star ratings, Mr. Rechtin said. The company is assuming it will lose the lawsuit it has filed challenging its 2025 star ratings, Mr. Rechtin said, and predicts it will face challenges from its star ratings in 2027, as well.
   
   “We don’t know what those outcomes are, but that’s how we have to plan the business,” he said.
   
   
3. Humana has typically had less rich benefit offerings than its competitors, Mr. Rechtin said. The company will look to narrow the gap in its benefit offerings in the coming years, he added.
   
   
4. Humana has typically outperformed its competitors in customer service, Mr. Rechtin said. The company is seeking to set a new customer service standard.
   
   “Benefits tend to attract new members. Service tends to keep them,” he said. “Better economics for this business comes from managing growth with retention first. Retaining a customer across multiple years, where you can have a bigger impact on their care.”
   
   
5. Humana’s CenterWell primary care and Medicaid businesses are performing well, Mr. Rechtin said, and the company will continue to invest in these areas.
   
   “If the story of Medicare Advantage is change, things we need to do differently, the story of CenterWell and Medicaid is to do more,” he said.