Humana (HUM) 2025 Earnings Call Presentation

Medicare Advantage Strategy - Humana's core business is Medicare Advantage (MA), which remains an attractive sector[22, 35, 36] - The company focuses on delivering a more stable and compelling MA margin through clinical excellence and operating leverage[22] - Humana aims for a 3%+ Individual Medicare Advantage pre-tax margin[31, 55, 56] - Sustained growth in Medicare Advantage depends on superior customer satisfaction and retention[100] CenterWell and Medicaid Growth - Humana will continue to allocate capital to CenterWell and Medicaid, viewing them as strategic growth engines[22, 33] - CenterWell Primary Care is on track to reach approximately $6 billion in revenue with over 440,000-460,000 patients in 2025, with wholly-owned centers demonstrating a 32% CAGR in average contribution margin from 2021 to 2024[141, 145] - Humana expects to improve Medicaid pre-tax margin by 200-300 bps as its Medicaid presence matures[215] Financial Performance and Operating Leverage - Humana expects adjusted operating expenses to grow at less than half the rate of revenue through 2028, inclusive of investments[189] - The company anticipates a 150-180 bps improvement in operating leverage by 2028, with over 50% driven by cost reduction[199, 200] - Humana projects a 6-8% CAGR in Individual Medicare Advantage PMPM Underwriting Margin from 2025E to 2028E[209, 210]