Humana Inc (HUM) Q4 2025 Earnings Call Highlights: Strong EPS Performance and Membership Growth …

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Thu, February 12, 2026 at 4:03 AM GMT+9 3 min read

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**Adjusted EPS for 2025:** $17.14, above initial guidance of approximately $16.25.

**Insurance Segment Benefit Ratio for 2025:** 90.4%, slightly better than guidance.

**Full-Year Adjusted EPS for 2026:** Expected to be at least $9.

**Individual MA Membership Growth for 2026:** Anticipated growth of approximately 25%.

**Net Stars Headwind for 2026:** Approximately $3.5 billion.

**Expected Premium Growth from 2024 to 2026:** 40% increase.

**Statutory Capital Requirements Increase from 2024 to 2026:** Less than 20% increase.

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Release Date: February 11, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Humana Inc (NYSE:HUM) reported a solid performance for 2025, with adjusted EPS of $17.14, exceeding initial guidance.

The company experienced significant membership growth, adding approximately 1 million members, a 20% increase during the Annual Enrollment Period (AEP).

Retention rates improved by over 500 basis points year over year, indicating strong customer loyalty.

Over 70% of new sales were from competitors' switchers, with a high percentage in contracts with 4 Stars or better.

Humana Inc (NYSE:HUM) anticipates individual Medicare Advantage (MA) membership growth of approximately 25% for 2026, with new members expected to be accretive to the enterprise.

Negative Points

The company faces a significant Stars headwind for 2026, with a net impact of approximately $3.5 billion, affecting margins.

Individual MA margins are expected to be slightly below breakeven in 2026, primarily due to the Stars headwind.

The advanced rate notice for Medicare Advantage came in below medical cost trend, creating uncertainty in funding.

There is a need for continued adaptation to the funding environment to maintain a stable and compelling margin.

The company has embedded a higher level of conservatism in its 2026 guidance due to the dynamic environment, indicating potential challenges ahead.

Q & A Highlights

Q: Can you expand on the level of earnings outside of the MA underwriting and contrast the MA underwriting margins between retained and new growth? A: Celeste Mellet, CFO: The enterprise accretive earnings include CenterWell, which benefits from new membership. Individual MA margins are slightly below breakeven for 2026. Continuing members are more impacted by the Stars headwind, while new members have similar margins due to acquisition costs and higher MLR.

Story Continues  

Q: How does the margin progress for new members over a three- to five-year period, and what is the expected benefit from achieving top quartile Stars by 2027? A: Celeste Mellet, CFO: Margins improve significantly from year one to year two due to reduced marketing load and improved medical benefit ratio. George Renaudin, President - Insurance, added that coding and medical management improve over time. James Rechtin, CEO, emphasized that achieving 75th percentile in Stars is a strategic target, allowing for industry indexing and planning flexibility.

Q: How have expectations for 2026 changed since the Investor Day, and what areas of guidance are more conservative? A: Celeste Mellet, CFO: The main difference is the embedded conservatism in the guidance. The assumptions include slightly higher cost trends due to the lack of a doc fix in 2025 and its inclusion in 2026. The guidance is more conservative overall to account for dynamic market conditions.

Q: Can you provide details on the 140,000 new D-SNP members and their profile? A: George Renaudin, President - Insurance: The absolute number of D-SNP members exceeded expectations, but as a percentage, it was slightly lower. Most new members did not come from competitor plan exits, and dual members tend to be more paneled to value-based partners.

Q: Is there anything that changes your view of the ultimate margin profile of the larger book of business by 2028? A: Celeste Mellet, CFO: The growth in membership provides significant operating leverage, and cost-cutting efforts are on track. James Rechtin, CEO, added that the focus is on achieving a sustainable margin trajectory, with Stars and rate notice adjustments being key considerations.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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