- Humana topped Wall Street expectations for the second quarter as insurers have continued to benefit from the COVID-19 pandemic as members put off care and carriers paid out less in claims. The payer reported its income more than doubled for the second quarter, hitting $2.6 billion, per results released Wednesday.
- Humana's revenue increased about 17%, reaching $19 billion for the second quarter while adjusted earnings of $12.56 per share also trampled analyst estimates in large part due to its lower medical cost ratio.
- Humana revised its outlook and now expects full-year EPS to be between $17.36 and $17.86 from a previous range of $16.04 and $16.54. The Louisville-based insurer also expects membership in individual Medicare Advantage enrollment to grow between 330,000 and 360,000 members from a previous range of 300,000 to 350,000 members.
The public health crisis gripping the globe has led to large second quarter profits for insurers as members' utilization of healthcare is drastically depressed as care is put off amid the pandemic.
All of the nation's largest insurers, Anthem, Centene, Cigna, Molina, UnitedHealth Group (which operates UnitedHealthcare) and CVS (which owns Aetna), all reported a surge in second quarter profits due to lower medical usage among members.
Humana, which largely sells Medicare offerings, reported its medical cost ratio fell to 76.4% for the second quarter from 84.4% during the prior-year period.
Humana's stock price was up nearly 3% in mid-morning trading as analysts expected a positive reaction to the quarter's results, "which suggests 2020 guidance is extremely conservative and points to the potential for upside into 2021" according to SVB Leerink.
Humana reported membership increased 11% among its individual Medicare Advantage segment and 17% among group MA plans, while stand-alone prescription drug plans fell 12%. However, Humana did see enrollment jump 48% in its state-based contracts.