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The 300 companies on this year’s list brought in over $12.5 trillion in revenue for the latest 12 months, with the median revenue figure at $24 billion.

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Employees say:"I sincerely appreciate how our company has embraced remote work and has continued to allow it to be an option for associates. Not only does working from home greatly improve my work-life balance and mental health, it gives me the opportunity to work with colleagues around the country, which makes collaboration more enriching and interesting."

Best Large Workplaces in Health Care

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Employees say:"The remote-first policy is the absolute best thing about Humana. Our team does an excellent job at fostering community and connection in a remote workspace and I absolutely love the flexibility associated with remote work. It has truly made work-life balance more manageable and makes me a more productive and satisfied worker."

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GPTW Health Care Large 2023-Humana

Employees say: 
 
"Commitment to equality, not only in their associates but their members-specific needs also. This creates a secure, safe place to work that eliminates a lot of stress in personal and career life."

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F500-2023-042-Humana

The health insurance company that serves tens of millions of customers in the U.S. reported fiscal year 2022 revenue of $92.9 billion, up 10% from the previous year, thanks in part to growth in membership and premiums from its Medicare Advantage plans. 
<ul> 
 	<li>Humana announced plans in February 2022 to reinvest $1 billion into its core business, specifically its Medicare Advantage plan.</li> 
 	<li>In May 2022, Humana’s CenterWell Senior Primary Care and the investment firm Welsh, Carson, Anderson &amp; Stowe announced a joint venture to develop and operate primary care clinics for Medicare patients, the second such JV between the two partners.</li> 
 	<li>In 2023, Humana anticipates strong growth from its privately run Medicare Advantage program due to high retention and a projected expansion in new members.</li> 
 	<li>Humana has climbed 10 spots on the Fortune 500 list in the last four years.</li> 
</ul>

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F500 2022-Humana

Founded in 1961, Humana is the fifth-largest health insurance company by membership in the U.S., offering coverage for over 20 million Americans. The company’s revenue grew to $83.1 billion in 2021, a 7.7% increase in revenue from 2020. Much of that growth was driven by Humana’s Medicare Advantage programs, which enroll roughly 5 million people; the company projects that membership in those programs will grow by another 8% in 2022. In April 2022, Humana announced the sale of a 60% stake in KAH Hospice, the nation’s largest home health and hospice provider, for $2.8 billion to private investment firm Clayton, Dubilier &amp; Rice.

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G500 110 Humana

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F500-2021-41-Humana

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G500-2020-166-Humana

In 2019, the health insurer's consolidated revenues grew to nearly $56.5 billion, a more than $8 billion spike from the previous year. Like other insurers, Humana was able to take advantage of the suspension of a health insurance industry fee, which lowered its tax burden. The company also boosted its earnings-per-share numbers with the help of stock buybacks. Humana’s dedication to the lucrative Medicare Advantage market, where it has captured some 18% of enrollment, continues to serve it well.

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Humana

Humana is yet another health insurer which climbed the ranks in the latest Fortune 500 list. In 2019, the company’s consolidated revenues grew to nearly $56.5 billion, a more than $8 billion spike from the previous year. Like other insurers, Humana was able to take advantage of the suspension of a health insurance industry fee, which lowered its tax burden. The company also boosted its earnings-per-share numbers with the help of stock buybacks. Humana’s dedication to the ever-lucrative Medicare market, as a for-profit insurer, continues to serve it well.

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Global business is back. After limping through a worldwide financial crisis and economic slowdown, the 500 largest companies ranked by revenues shattered all sorts of performance records in 2013: They racked up combined revenues of $31.1 trillion, up 2.5% from 2012, and profits soared 27% to nearly $2 trillion. China’s 95 companies (up from 89 last year) posted $5.8 trillion in revenues. The U.S. has four fewer companies on the list than last year but remains (for now) the country leader, with 128 corporations on the list—including No. 1 Wal-Mart Stores—reporting $8.6 trillion in revenues. 

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

Best Workplaces In Health Care

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A health insurance company, Humana is one of the largest administrators of Medicare Advantage, a U.S. government program that provides health care to older Americans via private insurers. Humana plans are available in nearly 3,000 U.S. counties, the most of any Medicare Advantage provider. Humana also runs state-based Medicaid plans for lower-income Americans; CenterWell primary care centers for seniors; as well as home health and hospice businesses.

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Humana (HUM): Company Profile, Stock Price, News, Rankings

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Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Lisa Stoner, Vice President of Investor Relations. Please go ahead.

Thank you, and good morning. I hope everyone had a chance to review our press release and prepared remarks, which are available on our website. We will begin this morning with brief remarks from Jim Rechten, Humana's President and Chief Executive Officer, and Chief Financial Officer, Celeste Mele, which will be followed by a Q and A session where Jim and Celeste will be joined by George Rennaden, President of Humana's Insurance segment. Before we begin our discussion, I need to advise call participants of our cautionary statement. Certain of the matters discussed in this conference call are forward looking and involve a number of risks and uncertainties.

Actual results could differ materially. Investors are advised to read the detailed risk factors discussed in our latest Form 10 ks, our other filings with the Securities and Exchange Commission, and our first quarter twenty twenty five earnings press release as they relate to forward looking statements along with other risks discussed in our SEC filings. We undertake no obligation to publicly address or update any forward looking statements in future filings or communications regarding our business or results. Today's press release, our historical financial news releases, and our filings with the SEC are also available on our Investor Relations site. Call participants should note that today's discussion includes financial measures that are not in accordance with Generally Accepted Accounting Principles or GAAP.

Management's explanation for the use of these non GAAP measures and reconciliations of GAAP to non GAAP financial measures are included in today's press release. Any references to earnings per share or EPS made during this conference call refer to diluted earnings per common share. Finally, this call is being recorded for replay purposes. That replay will be available on the Investor Relations page of Humana's website, humana.com, later today. With that, I'll turn the call over to Jim.

Thanks, Lisa. Good morning, everyone, and thanks for joining us. We are pleased with our start to 2025. We are reaffirming our full year guidance. We came in ahead of plan for Q1.

I will note that some of the outperformance in the quarter is timing related. It is also still early in the year, so we are continuing to monitor trends. This includes changes in consumer behavior due to the IRA. There's nothing new on our litigation related to CMS' twenty twenty six star ratings. We are still waiting on a ruling.

I think the best way to describe where we are at, at this moment is that while there are still challenges to navigate, there are no surprises. The external environment is evolving as we expected and we are executing against the things we control. We have scheduled an investor conference on June 16. We have three objectives. One, provide a clearer picture of the earnings power of the business.

Two, explain what it will take to unlock that earnings power and three, give you clarity on how to track our progress. Now I will briefly describe the progress we are making operationally And as usual, I will frame my comments today around the four basic drivers of our business. That is product and experience which drive customer growth, clinical excellence which delivers clinical outcomes and medical margin, a highly efficient back office, and capital allocation and growth in CenterWell and Medicaid. Regarding our Medicare product and experience, there are no changes to our membership guidance for 2025. We had strong performance in OEP and the early outlook for the rest of the year is trending positively.

As we head into the bid cycle, we believe the rate notice better reflects the trend environment and should enable greater industry stability. Regarding clinical excellence, operationally we continue to make progress on STARS. We are closing gaps in care and driving both quality and experience for our customers. For example, through recent partnerships, we are better engaging members who don't have a primary care provider. We are doing this by pairing in person home visits with virtual health.

We expect this work will close gaps in care by 25% year over year. Another effort is through our medication adherence campaigns in which we are seeing 30% to 50% reduction year over year in members with weight refills. Regarding a highly efficient back office, our G and A costs for the quarter were slightly better than expectations. This was largely due to the timing of costs that will be incurred in the second and third quarter. However, we are also seeing good progress in our cost management efforts.

One example is increased use of AI in our contact centers. This technology quickly surfaces complex information so our representatives can have more impactful interactions with our members while reducing call times. Regarding capital allocation and growth in our CenterWell Medicaid businesses, we're seeing robust patient and membership growth in primary care and Medicaid, continued growth in our value based models in home health, and volume growth in specialty pharmacy. Over the last year, we've added 30 new centers through acquisition and partnership, which are helping to fuel our growth in primary care. We received an intent to award notice from Illinois for their new dual eligible special needs program and CenterWell Pharmacy has started its work as the fulfillment center for NovaCare's weight loss medication directed to cash pay customers.

As you may have seen in the news yesterday, we have also reached fulfillment agreements with three other companies in the past few days. All in, I am encouraged by our recent performance and growth. And with that, I will turn it over to Celeste for a few remarks before we go to Q and A.

Thank you, Jim. I would reinforce that while it remains early, we've had a solid start to the year. The underlying fundamentals of the business, including membership and patient growth, revenue and medical cost trends are developing as expected. And we have been doing substantial work around operating efficiencies with a focus on increasing flexibility and operating leverage, while also making incremental investments to improve member and patient outcomes and support operational excellence, positioning the company for long term success. The EPS outperformance in the quarter was largely driven by a shift in the expected timing of certain expenses.

As a result, we are pleased to reaffirm our full year outlook, including adjusted EPS guidance approximately $16.25 and expected insurance segment benefit ratio of 90.1% to 90.5%. Looking ahead, we remain focused on managing the levers within our control, expanding margins and realizing the earnings potential of the business. These levers include quality, with a focus on delivering industry leading STARS results on a sustainable basis Clinical excellence, operating efficiencies, and continued maturity of our Medicaid and CenterWell businesses through their respective J curves. I am also spending time ensuring every dollar of the balance sheet drives value. Given my background, this is something that has been a major focus for me in prior roles, and I see a real opportunity to continue to increase the efficiency of our balance sheet.

All in, we believe there is substantial value to be unlocked at Humana over the mid and longer term, And we look forward to sharing more at our investor conference in June. With that, I will turn the call back to Lisa to start the Q and A.

Great, thank you, Celeste. Before starting the Q and A, just a quick reminder that to fairness and those waiting in the queue, we ask that you please try

to limit yourself to one question. Operator, with that, please introduce the first caller.

Our first question comes from Sarah James with Cantor Fitzgerald.

Thank you. I was wondering if you could help us with how much of your investments moved out of 1Q. Did it move into 2Q and outside of the timing of that, did 1Q come in line with your expectations?

Hi, sorry. I couldn't get my mic to work. So when we gave guidance for several hundred million dollars in investments earlier in the year, we said that the timing would be unclear. Most of the impact of the incremental investments flowed through the MLR in the first quarter. It was only about 10 basis points.

That was in large part because many of the STARS investments that Jim spoke about ramped later in the quarter. And we would expect them to be higher in the second through the fourth. So, still the same expectations for the level of investments in the year, just later in the year versus the first quarter.

Our next question comes from Ben Hendrix with RBC Capital Markets.

Hey, thank you very much. I was wondering if you could give us an update on your thoughts around the path to the 3% MA margin target. Clearly, the stars ruling will have a big impact there, but just anything changing on kind of the overall investment focus, investment targets and then kind of the impact you're thinking against this better than expected inmate rate update we're seeing for 2026? Thank you.

Yeah, Largely, we would describe things as we're in the same place that we've been. We're focused on getting back to a 3% margin. As you noted, the exact timing is tied to the outcome on STARS. It's very much where we are focused, but there's no meaningful change or update from what we've communicated in the past.

Our next question comes from Justin Lake with Wolfe Research.

Thanks. Good morning. Just sticking on STARS for a second, I was hoping to see if you had any update on timing, how you are expecting to handle bids or how we should think you're going to handle bids if you don't get an answer by the time you have to submit? And then most importantly, I remember last quarter you talked about the fact that you had made some real progress coming out of 2024 on your STARS initiatives for 2026 STARS, right? That'll come out in October.

I'm just curious, I know it's impossible to say where you end up, obviously, given all the volatility in the cut points. But I was wondering if you could tell us, if the cut points don't change, do you feel like you made enough progress that x cut points you're going to see enough underlying star performance improvement to get your stars back, right, or to be four stars and, you know, predominantly in 2026? Thanks.

Yeah. Hey, this is Jim. Let me hit a few things at a high level and then I'll hand it off to George as well. There were multiple questions in there, so I'm going to try to hit each of them. STARZ litigation, we really do not have insight into the timing.

It really is the legal system that dictates what that timing is, and we we do not have any more visibility than you do. You know, I will let George touch on bids here in a second. And then on the outlook on STARS, I'm going to continue to reiterate that we felt good about the progress we made in the fourth quarter of last year, and we feel good about the progress we're making this year. What we're really not going to do is speculate on what exactly that means and what are the cut points of this or that. That's a level of speculation that we're just not really going to entertain.

But we do feel good about the progress operationally. I think that's the most important message. George, do you want to talk about bids? Sure.

Sure. Thanks, Jim. Hey, Justin. Places where we are right now in bids is actually they're ongoing right now. We're actively working through the STARS strategy.

And as we've talked about before, work through the mitigation diversification strategy, really with the idea of reducing the amount of concentration we have on certain contracts. As we've talked about, that's going to be a multi year process as we work that through. We're currently working through that diversification. We're working through the bids. Given the competitive nature of the bids, we're not going to share our pricing strategy for competitive reasons obviously, and we're not going to give any specifics there, but I will tell you that what we're looking to do is balance membership and margins, focusing on maximizing long term earnings power of the business.

And we have to keep that in mind for the future as well. So that's our take going into it. With regard to some of the targets, as we've talked about before, we've set internal targets contemplating an appropriate buffer as we have our internal teams working towards ever increasing performance. And so that's the take we're going to have there and that we have to have in order to make sure that we return to industry leading stars results.

Our next question comes from Andrew Mock with Barclays.

Hi, good morning. Can you provide more color on your experience in Part D relative to expectations? And specifically, can you comment on the pace that seniors are tracking into the catastrophic phase? And are there any early indications for how senior behavior or manufacturer behavior is changing this year? Thanks.

Hi, a few things. One, generally trends across our business are trending in line and consistent with our expectations. Our guidance contemplated on the medical side mid single digit growth in trend, and that's consistent with what we're seeing. And on the pharmacy side, low double digit growth, and that is also consistent with what we're seeing. We have seen some of the dynamics that have been called out, including higher trends in oncology.

We did see that last year and again contemplated in our guidance. Everything is tracking in line, generally in line with our expectations.

Our next question comes from Steven Baxter with Wells Fargo.

Hi, thanks. Just obviously, there's been a lot of membership change on the, individual side of the business in particular. I guess, could you walk us through your visibility on risk adjustment at this point in the year and whether that needs to be thought about differently from a visibility point of view versus maybe the recent few years? And then I imagine you've gone back and probably done some diligence on Group MA in light of some of the industry commentary over the past couple of weeks. Let's get a better sense of kind of maybe what you've looked at on the group MA side.

And obviously, the PMPMs are up there a decent amount more than the individual books. Just trying to make sure that you don't feel like you're seeing some kind of behavioral response to that. Thank you.

Hey, it's George. Thanks for the question. So I'll talk a little bit about the membership shifts we're seeing, then I'll hit on Group A real briefly. With regard to the membership shifts we're seeing, we're pleased with our membership changes to date given the members that we gained versus those we exited. We are focused on the long term earnings power of the business and what we're seeing is a shift to higher lifetime value segments and membership.

We're seeing strong year to date performance in markets with a high concentration of members in our best performing markets, including markets such as Florida, Illinois and Texas. We're seeing a higher than historical percentage of our non DSNP members coming from other plans, which has some good implications for the MRA question that you asked. We want members with sustainable margin. They're pleased with the progress we've made there. So on the individual side, we're very pleased with our strategy thus far and that's playing out as we had desired.

On the Group MA side, Group MA is performing as expected to date. Revenue medical cost trends developing in line with our expectations. You may recall that in past quarters, we've talked about the fact that the group segment is one that has had historical multi year rate change guarantees, And that has led to some degradation as we have expected and is in our earnings guidance. We remain focused on improving those MA margins through renewal cycles. And what I can say today is that we've not seen any changes in behavior concerning trends due to that repricing activity.

So we're happy with where we are with group in May and that it is in line with our expectations.

And if I could add just to clarify, everything is in line with our expectations to date for both the health plan and Centerville as relates to MRA and revenue. The V28 impact is as expected as it was for 2024. And as a reminder, we did call out a pretty significant Humana health plan impact from the '28 last year, we called it about 160 basis point impact for 2025 and that is playing out as expected.

Our next question comes from AJ Rice with UBS.

Hi everybody. Thanks for the comments so far. I guess I'm just trying to think through you have reiterated that you still have a long term target of 3% pretax margin in in MA.

lot of moving parts. Obviously, The star Open Stars litigation, the Part D changes, and how that may play out next year depending on how they do the demonstration project, etcetera. But you do have a better than expected rate update. When you throw all that and everything else into the mix, the trajectory that you're on is your I know you'll get more detail at the Investor Day, but is there any high level comments you can make about whether the trajectory's changed, your optimism about, the progression you can make in '26, '20 '7, and '28 back toward your target margins?

Yeah. Hey, AJ. It's Jim. I'll start off here, and then we'll see if there's anything to add. Headline is if you set stars aside, we feel good about the underlying progress of the business.

And then the challenge of course is then to reconcile that with the STARS outcomes that are unknown. And so we do feel good about the underlying progress of the business. And to your point, one of our objectives at the investor conference is to be able to provide a little bit more color into what does that mean and how can you see it. You hit all of the many variables that are largely external that we're having to navigate. And yeah, there's a whole bunch of puts and takes in there.

The rate notice does better reflect trend and there are regulatory headwinds that we're still navigating. You know what they all are. They're not new. And we expect that to continue. There's going be puts and takes in the external environment.

What we are really focused on are what are the things that we can control? And there are things that we can control around medical cost, around G and A, around obviously stars. And that really is differentially where we're focused and that's where we're gonna spend most of our time when we get to the investor conference.

Our next question comes from Joshua Raskin with Nephron Research.

Hi, thanks. Good morning. Could you provide an overview of the integration strategies you have between the insurance segment and CenterWell? And within that, can you share performance trends on some of the cohorts and how those have been moving through CenterWell in recent years? I'm really just looking for an update on sort of levels of success you're having in these VBC arrangements and maybe how you plan to accelerate or not accelerate that in the future?

Yeah, I'll start and then George may add some pieces on the integration component of the question. At the highest level, what I would again say is we're seeing strong patient growth. We're seeing that both because we're adding clinics and we're seeing it within clinics. So we're seeing it on both sides, so that's a positive. The member growth within maturing clinics is largely in line with where we have been modeling it and expecting it and forecasting it.

And so, again, we feel good about that. The V-twenty eight mitigation efforts are continuing to take hold and the V-twenty eight impact is not really much different at all from what we modeled a couple of years ago. It's almost spot on. And so in total, we feel very good about the primary care business and the direction it's headed in. Obviously, the J curves are multi year.

It takes time to work through those. Like this is an investment that you have to have some patients around. But we feel very good about the nature of the investment and where it's headed. And and you're seeing each tranche of new centers performing pretty consistently in the J curve as you would hope or expect. So that's kind of where we're at broadly.

And then I'm going to make one comment on integration and then let George jump in. The main message across CenterWell, so this is not just primary care, this is across all three pieces of CenterWell, is that all three of those businesses have positive contributions to our STARS performance within the plan, to our accurate diagnosis and follow-up preventative care and the impact that that has on the plan and with retention of members. And so and so when you really think about, hey, how does that business help? It helps us with the core parts of how you deliver care effectively to MA members and that's good for the plan. Like that is it in a nutshell.

He can give you a couple of specific examples. Hey Jim, thanks. So we're seeing a growing share of our members with CenterWell PCO with our primary care organization, which is a big positive and is in line with that, you also see the interaction with our Cinnerewell Pharmacy and Cinnerewell Home. And the general thing that we see there is better health outcomes, for example, reduced ER visits, better care and all sorts of medical adherence measures, better care as far as screenings go and frankly just more interactions with the patient and our member, which is all very positive, which leads to the STARS results that Jim just mentioned being positive and higher retention.

So all in all, the continuing strategy and the interaction between the insurance side of the business and center well side of the business is very integrated. We are constantly figuring out how we can work better together to deliver better results for our members and their patients.

Our next question comes from Joanna Gajuk with Bank of America.

Hi, good morning. Thank you for taking the question. So on center, actually one question there. What drove outperformance in that segment earnings? You said something in the release along the lines of just some timing.

So I guess before you were talking about some shifts in timing around the investments you were making around STARS, but was there something else that was maybe different in Central Wealth? So can you talk about the results in the quarter? Thank you.

Hi, it's Celeste. So about a third of our beat in the quarter was driven by CenterWell, and that beat was driven predominantly by PCO and pharmacy. So some is timing related in terms of admin expense, but there is a portion that could be durable, such as favorable pharmacy drug mix. Specifically, we saw favorability on the specialty side including better than expected mix and strong agnostic sales. And then on the PCO side, we did have higher than expected patient growth.

And then there was some PPD favorability which we don't expect to repeat. So this could be durable, but it's early in the year and we're keeping an eye on that.

Our next question comes from Lance Wilkes with Bernstein.

Great. Again, on CenterWell, can you talk a little bit about how the individual businesses within CenterWell are performing relative to your 25 and long term kind of target margin expectations? And within primary care, can you talk a little bit about what drove the external revenue growth there? And in general, maybe just a little color on the puts and takes on internal versus external patient growth? Thanks.

Hey, it's Celeste. So as I had called out, we had about a third of our beat in the quarter was driven by CenterWell. Home was in line. PCO was ahead of expectations. Pharmacy was ahead of expectations.

As I called out, some of the pharmacy and PCO components, the specialty mix and the patient growth could be durable for the year and drive higher results for the year, but it's too early to call out or it's too early to call on that. Terms of hopefully I'm answering your question the right way. The revenue growth in CenterWell was driven by a combination of the patient growth, the higher than expected patient growth, as well as some favorable PPD. So the patient growth could sustain itself. The PPD would not typically higher in the first quarter.

Because of the outperformance in center, while we did have variability in our benefit ratio in the quarter, over the course of the year we would expect the benefit ratio for insurance and the consolidated to be consistent. In this case, the consolidated was lower because of that outperformance. And that's really driven by intercompany eliminations.

Our next question comes from Erin Wright with Morgan Stanley.

Great, thanks. On the Medicaid side of the business, how are you thinking now in terms of visibility into that state rate mismatch and how that's progressing now and your confidence in terms of as we go into the second half and resolution of that, and anything in terms of calling out in terms of utilization across that business? Thanks.

Hey, hello, it's George. I'll take this one. So Medicaid is emerging as we've talked about is a pretty strong scaled business with a lot of potential earnings contribution as we go forward. Right now, we're seeing is Medicaid is performing in line with our expectations for the quarter and we are prouder and prouder every day to serve an ever growing group of Medicaid members working with our safe partners. The Medicaid success is something that we're very proud of.

We're presenting a fresh new face on Medicaid through our company through the Healthy Horizons product that we have, and we're excited about the success we've had there. We continue to have strong growth. We've had approximately 100,000 growth year to date in line with the 175,000 to 250,000 growth we expected for the year. We're very excited about ending starting to get to a footprint of 13 states. Georgia declined to rebid the contract, which we were glad to see.

And we were selected, as Jim talked about in his opening remarks, for new Illinois contracts for the FIDE and LTSS business. That's pretty exciting because it opens up access to 450,000 duals in Illinois, which is a major win for us and we're very excited about that. The expansion population continues to grow for us. Virginia implementation is on track and going well. And what we're seeing is modest improvement in margins in 'twenty five as our rates are just to reflect recent trend experience.

So overall, we're happy with where we are. We're growing it as we've expected. And we're seeing trends in line with our expectations.

to add just one thing. You had asked about visibility into kind of state level rate adjustments. One of the benefits of having now expanded into more states and more programs is that while you're not gonna get every state right every year, the broader this program grows, the more you can forecast it across states. And so, you know, we did not get every single state right this last cycle and I'm sure we will not get every state right in the next cycle. But across the states, it actually was once again pretty close to where we expected it to be.

And we think we've built in pretty reasonable expectations for the back half of this year and the adjustments that we'll see there as well.

Yeah, that's fair Jim. I'd also add that our state partners have been very collaborative in working with us on those rates. And we do have visibility now to 76% of our ratings for this year. So again, we feel very good about where we are in our projections.

Our next question comes from Lisa Gill with JPMorgan.

Thanks very much and good morning. Celeste, I want to go back to your comment around mid single digit trend that you're seeing on the medical side. Can you maybe just talk about the level of visibility you have? And did you see any variability as you were exiting the quarter? And just secondly, I just want to make sure I understand the cadence of earnings.

Humana (HUM) Q1 2025 Earnings Call Transcript

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