Humana Says Medicare Advantage Bids May Cut Benefits in 2027
Humana said Wednesday that its 2027 medicare Advantage bid planning may require benefit adjustments as the company works toward a stable margin by 2028. CEO Jim Rechtin said cost pressure has persisted since 2024, even after the Trump administration moved away from a flat 2027 rate proposal and finalized a slight increase.
Humana Earnings Call
Rechtin said the company has to decide what changes to make to benefits in order to reach a sustainable long-term margin and an appropriate return on capital. He added, "This helps promote more stability in the industry as a whole, and it has a positive impact on the health of our seniors," and said, "Nevertheless, medical cost trend continues to outpace program funding."
The practical effect lands on members in local Medicare Advantage markets, where Humana may have to reshape benefits before it files 2027 bids. George Renaudin, president of Humana’s insurance segment, said the company must review benefits market by market and understand what matters most to members and the provider relationships behind those benefits.
Market-by-Market Review
Renaudin said any changes should have the least impact on the things that matter most to members. Rechtin echoed that point, saying, "It means you do it in a way that is thoughtful to your members."
The company said the cost pressure dates back to 2024, and the issue sits alongside its broader 2026 outlook. Humana affirmed that outlook Wednesday morning, reported $1.19 billion in profit and $39.6 billion in revenue for the first quarter, and said it expects to earn at least $9 per share this year.
Ratings and 2028 Margin
Humana also said its Medicare Advantage membership is projected to grow by about 25% compared with 2025, even as the number of people enrolled in plans with four or more stars in 2025 declined significantly. The company took that ratings fight to court, but the courts rejected the challenge in October.
That leaves the 2027 bid cycle as the next test of how Humana balances price, benefits and member retention. For customers, the company’s own description points to a narrower choice set in some markets, with the details likely to show up when bids are set for 2027.
