Humana CEO: We’ll Slow New Sales If Needed to Protect Quality
On Humana’s conference call, CFO Celeste Mellet said her team doesn’t expect that insurers will get a break in 2026 when it comes to medical and pharmacy cost trends. Percentage increases, she said, are likely to again be in the high-single-digits for medical costs and between 10 percent and 15 percent for pharmaceuticals.
“We’re not seeing anything that would suggest it should be different than that at the moment,” Mellet said.
To help Humana absorb the impact of those cost hikes, Rechtin is leading an efficiency initiative that seeks to save the company $100 million over the next few years. Included in that, he told analysts, is a recent deal to outsource parts of its finance work to Genpact as well as the rollout of an agentic artificial intelligence platform for call center staff.
“These changes are a small sample of our multiyear transformation, which will include near-term tactical cost programs, but also longer-term efforts that change how we operate,” Rechtin said.
The comments from Rechtin and Mellet came after they reported a third-quarter profit of $194 million on total revenues of $32.6 billion. A year ago, those numbers were $480 million and $29.4 billion, respectively. The company’s benefit ratio for the quarter was 91.1 percent, up 1.2 points from the same period of last year.
Shares of Humana (Ticker: HUM) fell 6 percent after executives’ earnings report and gave up another 5 percent on Nov. 6. They are now essentially flat from six months ago, leaving the company’s market capitalization at a little more than $30 billion.
