Nov 6 (Reuters) - Humana raised its annual profit forecast on Friday as it expects medical costs to remain in check during the year.
The company, one of the largest providers of Medicare Advantage plans for older adults and people with disabilities, is bucking an industrywide pullback by expanding enrollment in these plans amid a broader retreat by rivals.
"Humana is delivering positive results for our members, our patients and their health," CEO Jim Rechtin said. "We are also increasingly driving
financial and operating performance toward being 'ahead' of our plan."
The company reported a quarterly medical cost ratio, the percentage of premiums spent on medical care, of 93.7% in its insurance segment, lower than analysts' expectation of 94.39%, according to data compiled by LSEG.
It said medical and pharmacy cost trends are in line to better than its expectations, across new as well as existing membership.
Its individual Medicare Advantage membership increase of 23% year to date through the third quarter tracks its expectation of about 25% membership growth through 2026, the company said.
Once a key source of profit growth for insurers, these privately managed Medicare Advantage plans have been under pressure from rising medical costs for three years along with tighter reimbursement rates. The company sees annual adjusted profit of at least $9.50 per share, compared with at least $9 per share estimated previously. Analysts on average expected 2026 profit of $9.15 per share.
On an adjusted basis, it reported a quarterly loss of 70 cents per share, compared with analysts' estimate of a $1 per share loss.
(Reporting by Christy Santhosh and Sneha S K in Bengaluru; Editing by Pooja Desai)
