Humana earnings Q2 2026 beat estimates as medical costs stabilize

Humana earnings Q2 2026 came in ahead of Wall Street estimates, giving investors a cleaner read on one of the biggest issues in health insurance: medical costs. The company kept its full-year adjusted profit outlook at at least $9 per share, a steadier message than some investors appeared to want after other insurers raised guidance.

Humana reported adjusted earnings of $7.61 per share for the second quarter, above the $7.22 analysts expected in an LSEG survey. Revenue was $40.87 billion, topping the $40.61 billion expected by analysts, according to LSEG.

Net income rose to $694 million, or $5.73 per share, from $545 million, or $4.51 per share, in the same quarter a year earlier. Humana said adjusted results exclude items including amortization and impairment charges.

Shares fell more than 4% in premarket trading Wednesday despite the earnings beat. Cantor Fitzgerald analysts said in a Wednesday note that the unchanged outlook was a disappointment after other Medicare Advantage insurers recently posted beats and lifted their forecasts.

What did Humana report in Q2 2026?

• Adjusted earnings per share: $7.61, versus $7.22 expected by analysts surveyed by LSEG.
• Revenue: $40.87 billion, versus $40.61 billion expected by analysts surveyed by LSEG.
• Net income: $694 million, compared with $545 million a year earlier.
• 2026 adjusted profit outlook: at least $9 per share, unchanged from the company’s prior view.

Humana CFO Celeste Mellet said in an interview that the quarter benefited from performance in both the insurance business and CenterWell, the company’s health-care services unit. Both segments topped analysts’ sales estimates, according to StreetAccount.

Mellet said medical and pharmacy cost trends were in line with Humana’s expectations for both new and existing members. She also said Humana saw slight favorable movement in inpatient medical costs, especially among members treated by value-based providers, which are care groups paid in ways tied partly to patient outcomes and cost control.

Why are Medicare Advantage medical costs such a focus?

Medicare Advantage plans are privately run alternatives to traditional Medicare that serve older Americans and some people with disabilities. For insurers, profitability depends heavily on how much premium revenue they collect compared with how much they spend paying members’ medical bills.

That comparison is captured by the medical benefit ratio, which measures medical expenses paid as a share of premiums collected. Humana’s medical benefit ratio was 91.2% in the quarter, in line with analyst expectations and the company’s own expectations, according to Mellet.

The ratio was higher than the 89.9% Humana reported in the same period last year. A lower ratio generally means an insurer kept more premium revenue after paying benefits, which can support profitability.

Insurers with Medicare Advantage exposure have been under pressure for more than two years as more members sought care delayed after the pandemic and as expensive specialty drugs, including GLP-1 medicines, lifted costs. Investors have recently become more optimistic on parts of the sector as some companies raised outlooks and reported better control of medical expenses.

Mellet said Humana now views medical costs as more stable and is watching whether inpatient admissions continue to decline this year. She said pharmacy cost trends remain very elevated because of drug prices and new medicine launches, and that those costs are expected to be slightly higher next year than in 2026.

Humana expects changes to its 2027 Medicare Advantage plans to improve profitability and help it reach a sustainable pretax margin of at least 3% by 2028, according to Mellet. She said the company also expects earnings support from membership growth, better quality ratings for Medicare Advantage plans, pricing discipline and cost control.

This story draws on original reporting from CNBC.