Humana reported nearly $700 million in profits in the second quarter thanks to growth in its Medicare health plans and lower than expected medical and administrative costs.
The health insurer Wednesday said net income rose 18% to $696 million compared to $588 million in the second quarter of 2021. Revenues, meanwhile, were up 15% to $23.6 billion compared to $20.6 billion in the year-ago period.
Humana attributed the second quarter performance to “better-than-anticipated medical cost trends,” as the health insurer and the industry in general continue to weather the Covid-19 pandemic. The solid performance in its health insurance and healthcare services businesses and lower administrative costs figured in the company’s decision to raise its 2022 annual adjusted earnings-per share guidance to “approximately $24.75” from an earlier projection of $24.50.
UnitedHealth Group, Elevance Health and Centene, health insurers that have already reported their second quarter earnings, have also raised their financial forecasts for 2022.
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“We are pleased with our significant progress in growing the business, including our primary care clinics and our organic expansion of Medicaid membership, combined with the initial rollout of our value-based home care,” Humana chief executive Bruce Broussard said.
Humana’s total Medicare Advantage enrollment rose 4.5% to 5.1 million by the end of the second quarter. That membership includes 4.5 million enrolled in individual Medicare Advantage plans.
Humana is a big player in Medicare Advantage plans that contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines with some also offering vision, dental care and wellness programs.
Humana surprised investors earlier this year with a disclosure that it would add fewer individual Medicare Advantage members than an original forecast, prompting a decision to invest $1 billion in the company’s Medicare offerings to improve enrollment in 2023.
“Our strong 2022 EPS growth of 20 percent, and the investments our one billion-dollar value initiative allowed us to make in our 2023 Medicare Advantage product offerings demonstrate our commitment to balancing our long-term membership and earnings growth targets,” Broussard said.
