Humana Inc. 2025 Financial Report Highlights Key Growth Areas
Humana Inc., a prominent health services provider, has released its 2025 Form 10-K, highlighting key financial outcomes, operational developments, and strategic goals in the healthcare sector. The report emphasizes Humana's integrated care approach and its focus on Medicare and Medicaid services.
In terms of financial performance, Humana achieved total revenues of $129,664 million, marking a 10.1% increase due to rising Medicare member premiums and growth in state contracts and prescription drug plan businesses. The company reported income from operations of $2,704 million, a 5.5% rise attributed to revenue growth and administrative efficiencies. However, net income decreased slightly by 0.9% to $1,203 million due to adjustments and impairment charges. Diluted earnings per share dropped by 1.4% to $9.84.
Operationally, Humana maintains two primary business segments: Insurance and CenterWell. The Insurance segment, covering Medicare, Medicaid, and military services, reported premiums and services revenue of $123.8 billion. Individual Medicare Advantage accounted for $90.4 billion, while Group Medicare Advantage was $9.0 billion. CenterWell's revenue reached $22.5 billion, driven by pharmacy solutions.
Florida remains a strong market, with premiums generating $17.8 billion from one million individual Medicare Advantage members. By the end of 2025, Humana's total insurance medical membership reached approximately 15 million, including significant participation in Individual Medicare Advantage and military services. The company expanded its Medicare Advantage offerings with plans like Dual-Eligible Special Needs Plans.
Looking ahead to 2026, Humana projects a 25% growth in individual Medicare Advantage net membership and aims to add 150,000 members to group Medicare Advantage and one million to Medicare PDPs. State-based contracts may increase membership by up to 100,000. The transition to value-based care continues, with 68% of individual Medicare Advantage members in such arrangements by the end of 2025. CenterWell experienced a 39% rise in services revenue through primary care and pharmacy growth.
Regulatory adaptation remains crucial, given changes from the Inflation Reduction Act affecting Medicare Part D. Humana is also focused on workforce diversity, managing a voluntary turnover rate of 13.8% while ensuring comprehensive benefits for employee engagement. Strategically, Humana has exited the Employer Group Commercial Medical Products market to focus on long-term plans. A transformation program aims to optimize cost structure, incurring $449 million in charges for 2025.
Anticipating future challenges, Humana acknowledges its dependence on Medicare and Medicaid revenues amidst competitive pressures and regulatory shifts. Accurate pricing is crucial for managing healthcare costs, with risks in pricing, regulatory changes, and operational disruptions from system failures or cybersecurity issues. Management is enhancing Medicare offerings, expanding CenterWell, and investing in technology to boost efficiency and customer experience. Humana aims for growth and profitability while maintaining investment-grade credit ratings and sufficient liquidity for expansion.