Humana Inc. signage on the floor of the New York Stock Exchange (NYSE) in New York, US, on Wednesday, July 30, 2025. Photographer: Michael Nagle/Bloomberg

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Humana reported first quarter net income of nearly $1.2 billion as costs of care for older adults in its Medicare Advantage plans eased a bit but remained high.

Like many of its rival health insurers, the company has been battling rising medical expenses from customers in its health plans. Wednesday’s results reflected costs that are still up with the company’s benefit ratio, which is the percentage of premium revenue that goes toward medical costs, eclipsing 89%.

But Humana, which added more than 1 million enrollees in its Medicare Advantage plans this year, said its insurance segment benefit ratio of 89.4%, was “slightly favorable" to its earlier guidance of "just under 90%,” the company said Wednesday in its first quarter earnings report. “While it remains early, available information to date suggests that medical and pharmacy cost trends are slightly better than our expectations, across both new and existing membership.”

Medical loss ratios have risen to 90% and above for several health insurance companies as claims pile up from doctors and hospitals seeing an influx of patients with a pent up demand for medical care. The industry would prefer such ratios to be below 90% and into the mid 80s, where the industry was less than two years ago. In the first quarter of last year, Humana’s insurance segment benefit ratio was 87.4%.

Humana reported net income of $1.18 billion, or $9.83 a share, which was slightly lower than the first quarter of last year when the company had net income of $1.24 billion, or $10.30 a share.

Humana affirmed its annual adjusted earnings per share of “at least $9” but lowered its reported earnings per share guidance to “’at least $8.36’ from a previous estimate of 'at least $8.89,’” the company said.

Revenue jumped to $39.6 billion compared to $32.1 billion in the year-ago quarter thanks in part to a big jump in Medicare Advantage enrollment and continued growth of the company’s CenterWell health services business.

Wall Street analysts have been worried about Humana’s Medicare Advantage enrollment growth of 25% at a time rivals, including UnitedHealth Group’s UnitedHealthcare and CVS Health’s Aetna pulled such plans out counties they deemed unprofitable. Humana reported 7.1 million Medicare Advantage enrollees compared to 5.8 million in the year-ago quarter.

“We’ve had a solid start to the year and feel good about how our operating execution and transformation initiatives are setting us up for the future,” Humana president and chief executive officer Jim Rechtin said in a statement accompanying the earnings report. “We continue to make progress where it counts for customers - quality experience and outstanding care.”