Humana posted $41.2 billion in revenue for the third quarter ended September 30, up from $32.6 billion a year earlier, while its insurance segment benefit ratio came in at 93.7%, better than the company’s own guidance of slightly above 94%. Full-year adjusted earnings per share guidance was raised to at least $9.50, up from at least $9.00. The numbers, however, are only part of the story. Underneath them sits a two-year reset that has reshaped how the carrier operates in the broker market.
A year ago, only 20% of Humana’s Medicare Advantage members were enrolled in plans rated four stars or higher, down from 94% as recently as 2024. That collapse, which Humana’s own management estimated would create a $3.5 billion net revenue headwind, set off a chain of decisions that reached well into the broker market. Third-quarter results show the company has turned that around.
CenterWell, Humana’s health services division, added nearly 147,000 primary care patients year to date, a 30% increase, while generating $7.2 billion in revenue, up from $5.9 billion in the year-prior quarter. Humana also announced a joint venture with HPS, now part of BlackRock following a 2025 acquisition, replacing earlier partnerships with Welsh, Carson, Anderson & Stowe.
The company said the restructured arrangement lowers its cost of capital and eliminates a put option that would otherwise have required funding in 2027, freeing balance sheet capacity ahead of the period when the stars bonus payments are expected to flow.
CEO Jim Rechtin said the company is “increasingly driving financial and operating performance toward being ‘ahead’ of our plan.”
The year-over-year benefit ratio deterioration, up 260 basis points from 91.1%, reflects, in large part, the surge in new membership Humana absorbed in 2026. New members, on average, run at a higher benefit ratio than retained members.
Humana’s individual Medicare Advantage enrollment grew roughly 25% over 2025, according to the company’s own guidance reiterated through the third quarter, adding approximately one million members during the annual enrollment period alone. That membership boom widened the gap between premium revenue and medical costs, particularly as older and higher-acuity beneficiaries used care more frequently than modeled.
In October 2026, the Centers for Medicare & Medicaid Services (CMS) released its 2027 Medicare Advantage star ratings, and Humana’s standing shifted dramatically. Ninety-five percent of Humana’s members are now in plans rated four stars or higher for 2027, compared to just 20% a year ago. Star ratings determine eligibility for quality bonus payments, which reached $13.4 billion across the Medicare Advantage market in 2026, according to a KFF analysis of CMS data.
Analysts at Evercore ISI estimate the improved ratings could generate approximately $4.8 billion in government bonus payments for Humana in 2028, though the ultimate earnings contribution will depend partly on how much of that additional funding Humana reinvests in member benefits and provider arrangements.
During the Q3 earnings call, Rechtin signaled that early enrollment activity during the annual enrollment period, which runs through December 7, is running ahead of expectations. “So far, AEP performance is ahead of our initial expectations,” he said. “While it remains very early in AEP, we currently anticipate that our membership will be up for 2027.”
That outlook follows a year in which Humana exited plans covering approximately 600,000 members, targeting its lowest-rated contracts to reduce exposure on underperforming books heading into the stars recovery cycle.
CFO Celeste Mellet attributed part of the outperformance to “really strong relationships with our broker partners,” adding that consolidation among smaller plans had also driven stronger results for the larger carriers.
The stars collapse set off decisions that reached well past Humana’s investor presentations. With lower ratings cutting into quality bonus payments, Humana and other major carriers began pulling commissions on selected plans - a tactic used to slow enrollment in books that had become unprofitable to grow.
Humana stopped paying commissions to brokers on roughly one-third of its products, according to a TD Cowen research note. A November 2026 study published in Health Affairs found that the removal of broker commissions across the Medicare Advantage market led to a 21% decline in enrollment in affected plans between mid-2025 and January 2026. That was evidence that advisor behavior, rather than just plan design, shapes where beneficiaries land.
The question now, with Humana’s ratings recovered and membership growth resuming, is whether the commission structure follows. The carrier has not publicly committed to restoring commissions on the products where they were removed. CMS set the 2027 fair market value for initial Medicare Advantage commissions at $725 per member per year in most states, with renewals at $363. Whether Humana pays to those caps, or continues to steer enrollment through direct channels on selected plans, will shape which Humana products advisors can viably include in their client recommendations heading into the 2027 plan year.
