Humana's No. 1 Medicare Advantage priority: 5 notes

Humana expects its Medicare Advantage membership to decline by around 550,000 members in 2025. 

Company executives previously said they expected to lose a "few hundred thousand members" in 2025. Humana exited several markets where it claimed it could no longer operate profitably. 

Humana published its fourth-quarter and full-year earnings for 2024 Feb. 11. The company reported a net loss of $693 million in the last quarter of 2024. 

The insurer faced several challenges in its Medicare Advantage business in 2024, including rising medical costs and lower star ratings from CMS. Humana had 5.2 million individual Medicare Advantage members at the end of January, according to its earnings release. 

Here are five things to know about Humana's Medicare Advantage outlook: 

1. Membership losses were largely in line with Humana's expectations, except in D-SNP plans, where the company saw larger membership declines than expected, Humana CEO Jim Rechtin told investors on a Feb. 11 call.
   
   
2. George Renaudin, president of insurance at Humana, said the company is retaining the members it needs to improve its margins, and the company saw a larger proportion of members switching to Humana from other insurers than in previous years.
   
   
3. The company's growing Medicaid footprint could help bolster growth in dual-eligible plans in the future, Mr. Renaudin said.
   
   "Having a larger Medicaid footprint, and successfully implementing those states, will also help us going into the future. So while we've retained fewer members than we expected, we feel good about how we're set up for the future," he said. 
   
   
4. The company is putting "all of its energy" into improving its star rating quality in 2025, Mr. Rechtin said. Humana's Medicare Advantage star ratings declined significantly from 2024 to 2025.
   
   
5. Humana's No. 1 priority is improving its margins in Medicare Advantage, Mr. Rechtin said. The company is growing its Medicaid and primary care business, but must "strike a balance" between growing its smaller businesses and recovering its Medicare Advantage business, Mr. Rechtin said.
   
   Humana expects to grow its Medicaid business by 175,000 to 200,000 members in 2025. The company opened 48 new CenterWell primary care facilities in 2024.
   
   "We must continue to grow our earnings capacity through organic reinvestment and through acquisitions," Mr. Rechtin said. "This is clearly a second priority, but it is a priority nonetheless. Both CenterWell and Medicaid are important enablers of our long-term strategy."