Humana Forecasts Lower Annual Profit Due to Persistent Government Plan Costs
Humana (HUM) projects an annual profit below Wall Street expectations, indicating that expenses related to its government-backed plans for senior citizens will remain high throughout the year.
The company's shares declined by 5% to $253.20 in volatile premarket trading. Humana is a prominent provider of Medicare Advantage plans, where the U.S. government compensates private insurers with a fixed rate to manage healthcare for individuals aged 65 and above or with disabilities. The health insurer has grappled with increased medical costs over the past several quarters.
Humana anticipates adjusted earnings per share of approximately $16.25 for 2025, falling short of analysts' estimates of $16.71 per share, according to data gathered by LSEG. On an adjusted basis, Humana reported a fourth-quarter loss of $2.16 per share, aligned with analysts' predictions.