Humana said Wednesday it expects 2023 Medicare Advantage membership to increase 17% from the prior year, representing metrics that are "meaningfully higher than industry growth," as it also reported favorable MA inpatient utilization trends for the first quarter.
The MA membership increase is higher than the payer previously expected. In its fourth quarter 2022 earnings call earlier this year, Humana forecast a year-over-year increase of 14%.
Humana raised its full-year guidance for earnings and revenue after beating Wall Street expectations on both metrics in Q1, according to forecasts cited by Seeking Alpha.
Revenue for the quarter was $26.7 billion, up more than 11% year over year. Total membership was flat year over year at about 17 million.
The lower inpatient usage was partly attributable to a drop in COVID-19 claims, Humana executives said on a Wednesday call with investors.
Much of the 11% MA membership growth in the first quarter came from people switching plan providers, citing dissatisfaction in service from their previous payer, CEO Bruce Broussard said
Executives supported a final MA payment rule released by the CMS that phases in risk adjustment changes over three years instead of implementing them all at once as originally proposed.
SVB Securities analysts called the first quarter results "strong," noting medical costs were "well controlled" as the insurance segment reported a medical loss ratio of 86.4%, compared to 87.1% in the same quarter last year.
For the Medicaid segment, Humana noted contracts with Louisiana and Ohio began earlier this year and two requests for proposal are currently active. Florida's bid is expected to be awarded at the end of this year, and the payer believes it is "well prepared for this highly competitive" bid, Broussard said on the call.
Looming Medicaid redetermination losses will be offset by members joining from the recently added states, Humana CFO Susan Diamond said on the call.
The first quarter earnings results come after the payer announced earlier this year it is exiting the employer insurance business to focus on government programs. Humana also sold its majority stake in hospice arm Kindred about a year ago.
Humana's healthcare services arm CenterWell, launched as part of a reorganization announced in July 2022, reported revenue growth for the first quarter of 3% to $3.4 billion.