Updated at 12:45 p.m. ET on Oct. 30
Humana CEO Jim Rechtin told investors on the company's earnings call Wednesday morning that the insurer is already making investments to right the ship in its star ratings performance.
Humana revealed earlier that was facing a significant drop in its star ratings for 2025, with just 25% of its members enrolled in a plan with at least four stars. The insurer said the main factor is that one of its central contracts decreased from 4.5 stars to 3.5 stars.
Rechtin said during the call that the company shifted its call center focus to do more proactive outreach to members, which led beneficiaries to schedule more than 3,000 primary care appointments so far this week alone.
He said the team fully acknowledges that "we’ve got work to do get back to the results that we expect for ourselves."
"Our conviction remains high regarding the positive outlook for MA and value-based care," Rechtin said.
Multiple payers have filed suit against the Centers for Medicare & Medicaid Services over the most recent star ratings results, Humana among them. They're seeking to have the current scores set aside and recalculated.
In the lawsuit, Humana said three customer services phone calls were scored unfairly. UnitedHealth, another major player in MA, made similar claims in its own lawsuit over the star ratings.
Humana updated its outlook for the year thanks to a third quarter in which it beat the Street on both earnings and revenue.
The company said in the second quarter that it anticipated full-year earnings per share of "approximately $16" but now expects "at least $16," a slight bump amid a year of significant challenges in the Medicare Advantage space. Humana also reaffirmed that it expects a full-year medical loss ratio of about 90%, according to its earnings report released Wednesday.
Humana reported $480 million in profit for the third quarter, down from $832 million a year ago. Revenue did grow year over year, however, increasing from $26.4 billion in the third quarter of 2023 to $29.4 billion in the third quarter of 2024. Both figures surpassed Wall Street analysts' predictions, according to Zacks Investment Research.
Through the first three quarters, Humana has brought in $1.9 billion in profit and $88.5 billion in revenue. By comparison, it reported $3 billion in profit and $79.9 billion in revenue through the first nine months of 2023.
In prepared remarks from the management team, which were posted online ahead of the company's earnings call, executives said that the better-than-expected results were driven by higher revenue in MA than was expected as well as strong performance in its CenterWell primary care unit.
The insurer is mulling further investments in generating greater value across the enterprise, according to the statement, such as efforts to drive sustained membership growth and improve performance on the MA star ratings.
Humana also boosted its outlook for MA membership growth this year by 40,000 to 265,000, according to the statement. However, it still expects to lose several hundred thousand members in 2025 due to market exits in MA.
While it hasn't released 2025 guidance yet, the company anticipates earnings per share to align with expected results in 2024, assuming its MA membership declines match expectations and it makes planned investments in stars performance and other key areas.
Humana boasted total membership of 16.4 million in the third quarter, down from close to 17 million in the prior-year quarter.
The company will provide greater detail on its financials on its earnings call later today.