Humana's financial results for Q4 and for full-year 2024 show a 10% revenue increase, but that's about the only bright spot as the insurer was hit by significant losses, according to its Q4 earnings results.
Rising healthcare utilization and insufficient CMS rate increases have impacted Humana's profitability, with shares down 50% from their 2023 peak, numbers showed.
For the quarter, Humana posted a $693 million loss, more than in the previous quarter, when it lost $541 million. Profits were also down: They stood at about $1.2 billion for the year, about half of its 2023 total, when it raked in $2.5 billion in profit.
Revenues were the bright spot, hitting $29.2 billion in the quarter, a slight increase from Q3. For the year, revenue stood at $117.8 billion, compared to $106.4 billion in 2023.
Humana CFO Celeste Miellet said during an earnings call that the company needs to improve its approach to multi-year planning so it can better anticipate headwinds.
"We need to be ruthless about stopping things that are not driving better outcomes for our members and better returns for our shareholders," said Mellet.
WHAT'S THE IMPACT
Membership numbers are likely to decline by about 550,000 members in the individual Medicare Advantage sector, with standalone Part D plan membership expected to increase by about 200,000 members, and state-based contracts by roughly 175,000 to 250,000 members.
"We remain committed to achieving at least a 3% margin in individual MA, and we do view 2025 as a key year in that journey," said Humana President, CEO and Director Jim Rechtin.
Rechtin said Humana has started taking a number of steps to return to an industry-leading position by 2027.
"It will be tight, and ultimately, it will depend on the final thresholds," said Rechtin. "Having said that, I will reemphasize that we feel good about the progress we made in the fourth quarter."
"While we cannot fix the entire healthcare system on our own, we can make it easier for our patients and our members to navigate," said Mellet. "We can make it easier to understand what our members will have to pay when they see a doctor or require a procedure. We can do more to support our members with reminders to do preventative care to manage their chronic illnesses. We can take complicated health care topics and we can communicate about them more clearly and simply to our members. We can provide them better service every time they call us with a question or concern. Those are the things that we can do."
THE LARGER TREND
One pain point for the company is Medicare Advantage. Last fall Humana sued the Centers for Medicare and Medicaid Services over the results of the 2025 Medicare Advantage and Part D Star Ratings, calling them "unlawful."
The case centers on cut points, the upper and lower thresholds for each measure, which determine a plan's overall score, from 1-5 stars. Also, CMS did not follow its own ground rules on decision-making and failed to provide needed data, the complaint said.
Humana follows UnitedHealth Group and Elevance in filing a lawsuit against CMS and HHS over the star ratings results. All of the insurers cited a change in cut points as a major reason for their plans receiving lower star rating this year over last.
UnitedHealth won its lawsuit in late 2024. CMS appealed and then dropped the appeal.
Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.