Humana Inc. will shed about 600,000 members in 2027 as it exits some markets and focuses more narrowly on higher-profitability insurance plans, many of which use value-based care more widely.

Speaking with analysts after Louisville-based Humana reported its second-quarter results, CFO Celeste Mellet said the “targeted plan exits” are part of a multi-year strategy to expand the company’s margins even as it tangles with persistent treatment and drug cost increases of close to 10 percent. Dropping plans comprising about 600,000 people would equate to about 9 percent of Humana’s total member count as of June 30.

“Increasingly, we’re very much focused on the capital returns of the plan,” Mellet said July 29. “I would think about it as the plans with the highest returns. So rather than cut more uniformly across the board, [we’ll] really remove or cut off the lower tail of profitability and returns to ensure we can protect and retain the members and the benefits associated with our high-value plans.”

The leaders of Humana, which gets about 85% of its revenues from Medicare products, didn’t get into the details of their 2027 plan bid strategy. But Mellet and President and CEO Jim Rechtin did point out that Humana is growing elsewhere – they still expect individual Medicare Advantage membership growth to be about 25 percent this year – and that the company has in recent years recaptured a fair share of members that had been in plans it dropped.