Humana plans to invest a “few hundred million” dollars in its struggling Medicare Advantage business this year, executives said Tuesday.
“We’re focused on stars, of course, we’re investing in clinical excellence and membership strategies,” Chief Financial Officer Celeste Mellet said during the company’s fourth-quarter earnings call.
Related: 2025 Medicare Advantage market takes shape amid turmoil
Mellet said she would provide additional details in the coming months. The announcement came after Humana disappointed investors with its financial guidance for 2025.
Like its competitors, Humana has struggled to control the medical expenses of its 6.2 million Medicare Advantage members. The challenge was compounded by federal regulators enacting more stringent reviews of private Medicare plans' quality through the Star Ratings program. Among large insurers, Humana reported the biggest decline in ratings and is suing regulators to boost its scores. Companies that earn high ratings receive big bonuses.
Improving its star ratings, stabilizing its membership and investing in primary care are part of Humana's multiyear plan to improve its Medicare Advantage profit margins.
Here are five things the company said Tuesday about its position in the market.
1. Humana expects to lose up to 550,000 Medicare Advantage members this year, more than the 475,000 members previously projected. It has made the second-largest cuts to its geographic footprint this year after CVS Health’s Aetna. The unexpected loss is driven by Dual Special Needs Plan members, who qualify for both Medicare and Medicaid, switching from Humana plans at a greater rate than projected, Rechtin said.
2. Humana projects enrollment in its Medicare Part D standalone prescription drug policies to grow by 200,000 members in 2025, not flat as previously estimated. The insurer counts 2.2 million Part D enrollees. Competitors cutting Part D plans, the federal program to cut premium increases and marketing investments drove the uptick, Rechtin said.
3. Humana plans to add up to 30 CenterWell primary care centers this year. The company moved into 23 former Walmart Health clinics last year, and will look for similar growth opportunities, Rechtin said.
4. It has 65,000 employees, Rechtin said. That's a 4% decline from the 67,600 workers the company reported at the end of 2023, according to its annual report filed with the Securities and Exchange Commission.
5. The company said it would improve patient navigation, primary care services and member communications to address recent criticism of the health insurance industry – and Medicare Advantage. Rivals UnitedHealth Group, Cigna and Elevance Health have made similar promises. "Americans understandably want high quality, affordable care that’s easy to navigate. Too often that’s not what they’re receiving today. There is no one company and no one sector responsible for this, it is the system we are in,” Rechtin said.
