Humana expects Medicare Advantage plan exits next year to affect around 600,000 members as the insurer continues to focus on margin recovery.
“We will work to recapture a significant portion of that volume as we did in 2025,” CFO Celeste Mellet said on the company’s July 29 second quarter earnings call.
Humana recaptured just over 40% of members affected by its 2025 exits into other plans it offers, and it expects to recapture a similar share following the 2027 exits, she said.
On its first-quarter call in April, the company said the gap between MA funding and its medical cost trend was wider heading into the 2027 bid cycle than a year earlier and would require benefit and geographic adjustments, though it didn’t attach a membership figure at the time.
The pullback follows a year of outsized growth, with the company adding more than 1 million MA members for 2026 coverage. On the earnings call, executives said they still expect individual MA membership growth of approximately 25% this year.
Humana was an outlier among the national insurers during the last annual enrollment period, with UnitedHealthcare’s MA membership falling about 9% and Elevance Health’s dropped 14%, while regional plans posted record gains.
Rather than trimming benefits evenly across its portfolio next year, Humana is cutting what Ms. Mellet described as the lower tail of profitability and return, and prioritizing plans with greater value-based care penetration. The majority of the exits involve plans rated 3.5 stars or lower for the 2027 bonus year, though Ms. Mellet said the decisions were not primarily driven by star ratings. Twenty percent of the insurer’s members are in plans rated 4 stars or higher for 2026.
“We expect that our approach to 2027 MA bids will drive solid progress against our goal of delivering a sustainable pre-tax margin of at least 3% in 2028,” President and CEO Jim Rechtin said on the earnings call.
Humana posted $40.9 billion in second quarter revenue, up 26% year over year, and adjusted EPS of $7.61, which was ahead of analysts’ expectations. The insurer affirmed full-year adjusted EPS guidance of at least $9 but lowered its GAAP guidance to at least $6.52 from at least $8.36 as lower star ratings cut into quality bonus payments.
The 2027 exits follow two consecutive years of retrenchment for the company. It shed roughly 500,000 members in 2025 while exiting unprofitable plans and counties, and its 2026 footprint narrowed to 46 states and 85% of U.S. counties, down from 89% the year prior.
In April, CMS finalized a 2.48% average MA rate increase for 2027. More than 100 organizations had urged the agency to raise rates above its near-flat proposal, citing expected plan exits and instability in the program.
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