Humana told investors this summer that it plans to exit Medicare Advantage plans covering roughly 600,000 members in 2027, the second consecutive year the insurer has shrunk its footprint in the privatized Medicare program. Chief Financial Officer Celeste Mellet said on the company’s July 29 second-quarter earnings call that Humana expects to recapture only about 40 percent of those members into other Humana plans, an estimate built from how many of last year’s displaced members actually re-enrolled with the company. That leaves roughly 360,000 people who will need to pick a different insurer, move to Original Medicare, or default into coverage they did not actively choose. It adds to a broader pattern among Medicare Advantage insurers of shedding unprofitable markets, a trend that has already pushed many seniors nationwide to find new health coverage in the middle of retirement.
The 40 Percent Estimate, Straight From the CFO
Recapture rate is an internal metric insurers use to measure how many members from a discontinued plan stay with the same company by switching into one of its other offerings in the same county. It is not a regulatory figure, and Humana has not disclosed the underlying data behind the number. Mellet told analysts the company would work to recapture a significant portion of the affected volume, matching the pattern from 2025.
Mellet said Humana expects to bring back roughly 40 percent of the members losing coverage, or about 240,000 people, mirroring the recapture rate the company reported after last year’s exits, according to Healthcare Dive’s account of the earnings call. Becker’s Payer Issues, reporting on the same call, put the 2025 rate at “just over 40%.” The 600,000 members affected represent about 8 percent of Humana’s roughly 7.2 million Medicare Advantage enrollees nationwide.
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A Second Straight Year of Shrinking Coverage
The 2027 exits follow a similar pullback in 2025, when Humana shed roughly 500,000 members while exiting unprofitable plans and counties, narrowing its footprint to 46 states and about 85 percent of U.S. counties, down from 89 percent the year before, Becker’s reported. The contraction came even as Humana added more than 1 million new Medicare Advantage members for 2026 coverage by retaining more generous benefits than competitors. Executives said they still expect individual Medicare Advantage membership growth of roughly 25 percent this year.
A Margin Target Driving the Cuts
Executives described the exits as part of a deliberate push toward a specific financial target: a sustainable pretax margin of at least 3 percent by 2028. Mellet described the plans being eliminated as “the lower tail of profitability and return,” and said the company is prioritizing plans with greater value-based care participation over trimming benefits evenly across its entire book of business.
The margin push comes as Humana’s own numbers show mixed results. The insurer posted $40.9 billion in second-quarter revenue, up 26 percent year over year, and adjusted earnings per share of $7.61, ahead of analyst expectations. But Humana lowered its unadjusted, GAAP earnings guidance to at least $6.52 per share for the year, down from a prior forecast of at least $8.36, and its stock fell nearly 8 percent the morning the results were released. Humana remains the second-largest Medicare Advantage insurer after UnitedHealth, and could overtake UnitedHealth this year given its recent membership growth. Even so, Leerink Partners analyst Whit Mayo described the results as “slightly underwhelming” overall, and competitors including UnitedHealth, Elevance Health, Centene and Molina posted stronger-than-expected second-quarter Medicare Advantage results and raised their 2026 earnings guidance in the same reporting period.
Why the Money Behind Medicare Advantage Plans Is Tighter
The exits are unfolding against a broader funding picture that insurers have called insufficient in prior years. The Centers for Medicare & Medicaid Services finalized its 2027 Medicare Advantage rate announcement in April, projecting an average payment increase of 2.48 percent, or more than $13 billion in additional payments to plans nationwide, according to the agency’s fact sheet. That final rate was a substantial increase over the 0.09 percent the agency had floated in its earlier advance notice, but insurers including Humana have said the gap between that funding and their medical cost trend remains wide enough to require plan-level cuts heading into the 2027 bid cycle. On an earlier call in April, Humana said the gap between Medicare Advantage funding and its medical cost trend was already wider heading into the 2027 bid cycle than a year earlier, requiring benefit and geographic adjustments, though it did not attach a membership figure to the plan at that time.
The Enrollment Window for Members Whose Plans Are Ending
Medicare sets specific rules for what happens when a plan does not renew its contract. Members enrolled in a Medicare Advantage, Medicare Advantage with drug coverage, or Medicare Cost Plan that is not renewed get a Special Enrollment Period running from December 8 through the last day of February the following year to switch into a new plan, according to Medicare.gov’s enrollment guidance. Anyone who does not select a new Medicare Advantage plan during that window is automatically returned to Original Medicare, without the extra benefits, such as dental or vision coverage, that many Medicare Advantage plans bundle in. For the roughly 360,000 Humana members Mellet’s own estimate suggests will not land in another Humana plan, that federal rule, not the insurer’s recapture math, determines where their coverage ends up if they do not act.
This article was produced with the assistance of AI and reviewed by The Financial Wire editorial team.
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David M. Keller is a finance writer based in Columbus, Ohio, covering personal finance and consumer-focused economic topics. He earned his degree in journalism from Ohio University and began his career reporting on local business and economic trends for a regional media outlet. Since then, he has contributed to a variety of online publications, focusing on clear, practical coverage of topics such as cost of living, debt, and everyday financial decision-making.
