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Humana (NYSE:HUM) disclosed on Monday it anticipates benchmark Medicare Advantage (MA) funding rates to be lower than a flat rate environment.
The estimate is based on a preliminary analysis of 2025 policy payment rates and changes proposed by the U.S. Centers for Medicare and Medicaid Services (CMS).
The health insurer said the proposals would result in a change to its benchmark funding that is approximately 160 basis points worse than an expected flat rate environment.
It explained the difference “is primarily due to the proposed effective growth rate restatements, which the company did not anticipate in light of the higher medical cost trends experienced across the industry, as well as the negative impact of CMS’ proposed normalization factors.”
Humana’s (HUM) 2025 outlook of $6 to $10 in adjusted EPS growth remains unchanged, and it will provide feedback to CMS regarding the proposed changes.
