By Josh Nathan-Kazis

The insurer Humana reports its third-quarter results on Wednesday on the tail end of what has been a bumpy earnings season for the large managed-care companies.

Humana shares have performed decently this year, rising nearly 11% while the Health Care Select Sector SPDR exchange-traded fund is up 5.4%. That is a welcome reversal from 2024, when Humana shares plummeted by more than 40%.

Humana's problems were manifold. Higher-than-expected medical costs for seniors enrolled in Medicare Advantage, the government-funded insurance plans in which Humana specializes, weighed on the bottom line. At the same time, a cut to the government quality rating of Humana's largest Medicare Advantage plan meant the company would lose out on future government bonuses. And amid all that, a hoped-for acquisition by Cigna failed to materialize.

This year, earnings have looked good, and there have been signs the company is on the road to recovery.

All the worries aren't in the rearview mirror, however.

Humana shares dropped 12% on a single day in September in response to fear that the government's Medicare Advantage quality ratings for 2026 would be tougher than anticipated. The company said in early October that 20% of its members are in Medicare Advantage plans that will have at least four out of five stars in 2026, the top two quality-rating levels, down from 25% the prior year.

Analysts expect Humana to report sales of $32 billion and earnings of $2.93 per share, according to FactSet. The anticipated medical-loss ratio, which tracks the proportion of premiums paid out to cover medical expenses, is 91.1% for the quarter.

Other insurers have fallen in response to their earnings in recent weeks. Cigna shares fell 17% on Oct. 30 after flagging worries about profit margins for its pharmacy-benefit-services division.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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November 04, 2025 16:53 ET (21:53 GMT)

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