0000049071-26-000023
SEC filingRevenue grew 23.5% driven by Medicare membership growth, but net income fell 4.7% due to a higher benefit ratio and value creation initiative costs.
For the three months ended March 31, 2026, Humana reported total revenues of $39.6 billion, a 23.5% increase from $32.1 billion in the prior-year quarter. The growth was primarily driven by a 33.6% increase in total Medicare membership (to 10.98 million), higher per-member Medicare Advantage and stand-alone PDP premiums from increased CMS benchmark funding and the Inflation Reduction Act's Part D direct subsidy, partially offset by the Bonus Year 2026 Star Ratings headwind.
Net income attributable to Humana was $1.19 billion ($9.83 per diluted share), down 4.7% from $1.24 billion ($10.30 per diluted share) in Q1 2025. The decline was driven by a 240-basis-point increase in the consolidated benefit ratio to 89.4%, reflecting the Star Ratings headwind, higher benefit ratios from new individual MA members, and lower favorable prior-period medical claims reserve development ($389M in Q1 2026 vs. $477M in Q1 2025). These factors were partially offset by improved pricing and clinical excellence efforts. The consolidated operating cost ratio improved 40 bps to 10.2%, benefiting from operating leverage on revenue growth and cost-cutting initiatives.
Insurance Segment: Premiums revenue rose 23.6% to $37.7 billion, with individual MA premiums up 24.6%, group MA up 25.4%, and stand-alone PDP up 80.7%. Membership growth was broad-based: individual MA +22.6%, group MA +27.3%, and stand-alone PDP +58.7%. Income from operations decreased 8.8% to $1.4 billion as the benefit ratio increased 200 bps to 89.4%, driven by the same factors as the consolidated level. The operating cost ratio improved 90 bps to 7.3% on revenue leverage and cost initiatives.
CenterWell Segment: Total revenues increased 19.7% to $6.1 billion, with external services revenue up 32.0% to $1.4 billion, led by primary care (+68.0%) from acquisitions and payor-agnostic expansion. Intersegment revenue grew 16.4% to $4.7 billion, driven by higher Medicare membership. Income from operations fell 26.3% to $289 million as the operating cost ratio rose 340 bps to 94.5%, reflecting the final year of the v28 risk model phase-in, higher-margin specialty pharmacy mix, and transaction/integration costs from the MaxHealth acquisition.
Management highlighted ongoing value creation initiatives, with $98 million in charges recorded in Q1 2026 (vs. $24 million in Q1 2025), and expects additional charges over the program's course. The company noted progress on tactical cost cutting and transformation initiatives, which are expected to drive administrative efficiencies. Key headwinds include the BY 2026 Star Ratings impact and the final year of the v28 risk model phase-in. The MaxHealth acquisition (closed February 2026 for ~$908M) is expected to strengthen the primary care platform in Florida. No formal quantitative guidance was provided in the MD&A section.
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Conclusion: The provided document excerpt only contains the table of contents for Humana Inc.'s 10-Q for the quarter ended March 31, 2026. The actual Notes to Financial Statements are absent, so no structured data could be extracted. To perform analysis, the full text of the Notes is required.
The provided document excerpt is a table of contents and does not include any actual figures from the cash flow statement. Therefore, no analysis of CFO, capex, FCF, or capital returns is possible. The filing references a cash flow statement on page 7, but the content was not included in the input. No numerical data can be extracted.