How Humana Grew From a 78-Bed Louisville Nursing Home to a $130 Billion Giant

In 1959, a young lawyer named David Jones sat down for a job interview at the Louisville firm of Wyatt, Grafton & Sloss and met another young lawyer, Wendell Cherry. The two became friends. Jones handled real estate matters for clients, and one of them, the buyer of an expensive home, told him he had made his money owning a nursing home.

"I rushed back to Wendell and said, 'Let's build a nursing home,'" Jones told Louisville Business First in 2011.

Each man put up $1,000. Four friends matched them. In 1962 their first Heritage House nursing home opened on Liverpool Lane in Louisville with 78 beds. Sixty-four years later, the company they started reports nearly $130 billion in annual revenue, insures or administers coverage for 15 million people, and is still headquartered a few blocks from the Ohio River on Main Street.

Along the way Humana changed industries twice, survived a blocked $37 billion takeover, and is now working out of the hardest stretch in its modern history.

Two Lawyers and a Nursing Home (1961 to 1968)

Jones, born in Louisville in 1931, attended the University of Louisville on a Navy ROTC scholarship and earned his law degree at Yale. Cherry, from Horse Cave, Kentucky, finished first in his class at the University of Kentucky College of Law in 1959.

They founded the company in 1961 and built nursing homes one at a time, learning to negotiate land deals, financing and zoning. By 1968 they had eight homes. That year they took the company public as Extendicare Inc. at $8 a share. By the end of the year the stock traded above $80.

By 1969 Extendicare had opened its 50th nursing home and become the largest nursing-home operator in the country.

From Extendicare to Hospitals (1968 to 1983)

Not every bet worked. From 1969 to 1971 the company ran a division that developed mobile-home parks, on the theory that the skills for nursing-home real estate would transfer. They did not. "We shut it down and took a big loss," Jones said later. He called getting out "one of the greatest decisions at Humana."

The bet that did work was hospitals. In 1968 Extendicare leased its first hospital, in Huntsville, Alabama. Jones and Cherry had seen projections that the country would need $20 billion to $30 billion of new hospital construction in the 1970s, and most hospitals were run by local owners. A company running dozens of them centrally should run them more cheaply.

In 1972 they sold every nursing home, the business that had made them rich, to focus entirely on hospitals. In January 1974 Extendicare became Humana Inc. The new name came out of work with a French marketing consultant and was meant to soften the company's image and put the emphasis on human care.

In 1978 Humana, then the third-largest hospital chain in the country, acquired the No. 2 chain, American Medicorp, a deal that doubled its size. By 1982 it owned 90 hospitals, mostly across the Sun Belt, and it went on to become the largest hospital operator in the United States.

Louisville got some of that growth directly. Humana Hospital-Suburban opened in 1972, Humana Hospital-Southwest in 1977 and Humana Hospital-Audubon in 1980. On November 25, 1984, surgeon William DeVries implanted a Jarvik-7 artificial heart in William Schroeder at Humana's heart institute at Audubon. Schroeder, only the second recipient of the device, lived 620 days with it, and the coverage put Humana's name in front of a national audience.

The Bet on Insurance and the 1993 Split

The move that defines Humana today started with a lost contract. In 1983, one of its hospitals in Arizona lost its contract with the largest health maintenance organization in the area. Rather than accept emptier beds, Humana created its own health plan. Early in 1984 it launched Humana Health Care Plans, priced low to steer members into Humana hospitals.

The strategy built in a conflict: a hospital company wants full beds and high prices, an insurer wants the opposite. Only about 46% of plan members used Humana hospitals. In the early 1990s the hospital side was also facing a congressional inquiry into overcharging.

In 1993, with Jones still running the company, Humana spun off its hospital business, more than 75 hospitals, as a separate public company called Galen Health Care. Galen was soon absorbed by Nashville's Columbia Hospital Corp. in a $3.4 billion deal covering 73 hospitals. The four hospitals left over went into Alliant Health System, a predecessor of today's Norton Healthcare.

"I saw a better future in the insurance business," Jones said of the decision. That same year Humana formed Humana Military, which began serving TRICARE beneficiaries in 1996 and still administers coverage for 4.6 million military members and families.

Cherry did not see the split. He died of lung cancer in July 1991, at 55. Jones stepped back from day-to-day management in 1997, returned briefly as interim CEO in 1999, and handed the job to Michael McCallister in 2000. He retired as chairman in 2005.

A Pink Granite Statement on Main Street

At the height of the hospital era, Humana built a headquarters meant to be noticed. In 1982 it held a design competition that drew Michael Graves, Norman Foster, César Pelli, Helmut Jahn and Ulrich Franzen. Graves won with a 26-story pink granite tower, each side designed differently. It opened at 500 West Main Street in May 1985, won an American Institute of Architects National Honor Award in 1987, and was named by Time one of the ten best buildings of the 1980s.

The tower is no longer Humana's home. In February 2024 the company announced it would leave the building, citing hybrid work and structural repairs, and consolidate at its Waterside and Clocktower buildings; its principal executive office is now 101 East Main Street. On February 3, 2026, Mayor Craig Greenberg announced that the Graves tower, since sold, will be converted into a roughly 1,000-room convention hotel.

Medicare Advantage, Aetna and the Deals That Did Not Happen

When Medicare's Part D prescription drug benefit started in 2006, Humana expanded aggressively in both drug plans and Medicare Advantage. In 2010 it announced a Medicare Part D plan co-branded with Walmart; the Humana-Walmart plan is still sold today.

In March 2018 the Wall Street Journal reported that Walmart and Humana were in early talks about a possible acquisition or other tie-up; no deal followed. In late 2023 Cigna and Humana explored a merger and called it off in December over price.

The deal that came closest was Aetna's. In July 2015 Aetna agreed to buy Humana for $37 billion in cash and stock. The Justice Department sued to block it, and on January 23, 2017, U.S. District Judge John D. Bates ruled the combination would substantially lessen competition for individual Medicare Advantage plans. The companies terminated the agreement on February 14, 2017, and two days later Aetna paid Humana a $1 billion breakup fee.

Under Bruce Broussard, who became CEO on January 1, 2013, Humana leaned further into Medicare and decided to leave employer-group commercial health insurance, an exit it completed in 2025.

CenterWell: Back Into Care Delivery

Decades after spinning off its hospitals, Humana rebuilt a care-delivery business aimed at seniors. In 2018 it joined two private equity firms in buying Kindred Healthcare, taking a 40% stake in the Kindred at Home home-health and hospice business for about $800 million. In 2021 it bought the remaining 60% at an enterprise value of $8.1 billion and closed the deal that August.

Those businesses now sit under CenterWell, a brand Humana introduced in March 2021 for services it sells to its own members and to other payers. CenterWell runs senior-focused primary care clinics (398 centers as of June 30, 2026, up 19% in a year), home health in 37 states, and a mail-order and specialty pharmacy.

The Stars Problem and a New CEO (2024 to 2026)

The Medicare Advantage concentration that made Humana valuable also made it fragile.

On January 18, 2024, Humana warned investors that medical costs among its Medicare Advantage members had risen far faster than expected late in 2023, especially inpatient care, outpatient surgery and supplemental benefits. It posted a fourth-quarter loss of $541 million and cut its outlook. The stock fell about 11% that day.

Then came the star ratings. Medicare pays bonuses to plans rated 4 stars or higher, and 94% of Humana's Medicare Advantage members were in such plans for 2024. In the 2025 ratings that figure collapsed to 25%, partly because of failed test calls to its call centers that required an interpreter. Humana sued, with more than $1 billion of revenue at stake; a federal judge dismissed the case in October 2025 and Humana appealed. For 2026 only 20% of members were in 4-star-plus plans, though the average rating held at about 3.61.

Leadership changed mid-crisis. Jim Rechtin, a former Envision Healthcare CEO and OptumCare president who joined as president and chief operating officer in January 2024, became CEO on July 1, 2024.

Rechtin's Humana first shrank, then grew. For 2025 it exited unprofitable plans and counties affecting about 560,000 members. For 2026 it priced to grow, and by June 30, 2026 individual Medicare Advantage membership was up about 1.2 million, or 23%, for the year. Because of the ratings hit, it guides to 2026 adjusted EPS of at least $9.00, down from $17.14. For 2027 it is trimming again; about 600,000 members are in plans that will not return. Medicare's 2027 star ratings, which Humana has said should put a meaningfully higher share of members in 4-star plans, arrive in October ahead of open enrollment.

How Humana Seeded Louisville's Health Economy

Louisville's healthcare corridor grew up around Humana, and some of the links are direct:

• Galen College of Nursing. Humana founded it in Louisville in 1989 as Galen Health Institutes to train nurses at scale. HCA Healthcare took a majority stake in 2020.
• Chrysalis Ventures. David A. Jones Jr., the founder's son, started the Louisville venture firm in 1993 after noticing that the middle of the country had almost no resident venture capital. He later chaired Humana's board from 2005 to 2010.
• XLerateHealth. When the health-tech accelerator launched in Louisville in April 2013, its chief operating officer, Jackie Willmot, had spent more than 15 years as a Humana executive.
• UofL's Health Equity Innovation Hub. In 2022 Humana and the Humana Foundation committed up to $15 million of the hub's $25 million launch budget, and Humana donated an eight-story, roughly 130,000-square-foot office building at 515 West Market Street to house it.
• The Humana Foundation. Established in 1981, it underwrote Actors Theatre's Humana Festival of New American Plays for decades.

One caveat: Humana put its flagship digital studio, Studio H, in Boston, not Louisville. That gap is the opening for Louisville's healthcare AI startups, which are building next to the payer.

Humana by the Numbers

Figures are for fiscal year 2025 (ended December 31, 2025) unless noted, from Humana's 2025 Form 10-K and Fortune.

• Revenue: $129.7 billion, up 10.1% from $117.8 billion in 2024
• Net income attributable to Humana: $1.19 billion ($9.84 per diluted share; $17.14 adjusted)
• Medical members: 15.0 million, including 5.25 million individual Medicare Advantage, 4.6 million TRICARE and 1.6 million in state-based contracts such as Medicaid
• Employees: about 67,060
• Fortune 500 rank: No. 34 (2026 list)
• CenterWell primary care centers: 398 (June 30, 2026)
• Headquarters: 101 East Main Street, Louisville
• Ticker: HUM on the New York Stock Exchange
• 2026 outlook: adjusted EPS of at least $9.00; individual Medicare Advantage membership growth of about 25%

What Founders Can Learn From Humana

Listen to customers who are not your customers. The original idea came from a real estate client who happened to own a nursing home. Jones was paying attention to how other people made money.

Sell the thing that made you successful when the market moves. In 1972 and again in 1993, Humana sold its proven business to move toward a larger, faster-growing market before it was forced to.

Kill bad experiments quickly. The mobile-home park business lasted about two years. Jones counted shutting it down among the best decisions the company made.

Use a setback as a product spec. Losing an HMO contract in Arizona is the reason Humana became an insurer at all.

Concentration cuts both ways. Medicare Advantage made Humana the No. 2 player in a market that covers more than half of Medicare beneficiaries. It also meant that one regulator's scoring of call-center test calls could move more than $1 billion of revenue. If your customer is a single government program or a single platform, model what happens when its rules change.

Stay put if your advantage is local. Humana has stayed in Louisville for 65 years, and the talent, capital and institutions it seeded are now available to anyone building a company in Louisville. For a starting point, see the Louisville startup directory.

Frequently Asked Questions

Who founded Humana?

Humana was founded in Louisville in 1961 by David A. Jones Sr. and Wendell Cherry, two lawyers who met in 1959 at the Wyatt, Grafton & Sloss law firm. Each invested $1,000 and four friends added $1,000 apiece. Their first Heritage House nursing home opened on Liverpool Lane in 1962 with 78 beds. Cherry died in 1991 and Jones died on September 18, 2019, at 88.

Is Humana headquartered in Louisville?

Yes. Humana's principal executive office is at 101 East Main Street in downtown Louisville, Kentucky, part of its Waterside and Clocktower campus. In 2024 the company announced it was leaving the Michael Graves-designed Humana Building at 500 West Main Street, which opened in 1985 and is being converted into a convention hotel. Humana has been based in Louisville since its founding in 1961.

How did Humana get its name?

The company was called Extendicare when it ran nursing homes. After it sold those homes in 1972 to focus on hospitals, it renamed itself Humana Inc. in January 1974. The name came out of work with a French marketing consultant and was chosen to soften the company's image and emphasize human care.

How much revenue does Humana make?

Humana reported revenue of $129.7 billion for fiscal year 2025, up 10.1% from $117.8 billion in 2024, with net income attributable to the company of about $1.19 billion. Most of that revenue comes from Medicare Advantage premiums. The 2025 figure placed Humana at No. 34 on the 2026 Fortune 500.

Who owns Humana?

Humana is a publicly traded company owned by its shareholders. Its stock trades on the New York Stock Exchange under the ticker HUM, and it had about 684,000 beneficial holders as of January 31, 2026. A 2015 agreement for Aetna to acquire Humana for $37 billion was blocked in court and terminated in 2017, so the company remains independent.

How many members does Humana have?

At the end of 2025 Humana had about 15.0 million medical members, including roughly 5.25 million in individual Medicare Advantage plans, 4.6 million military beneficiaries under its TRICARE contract and 1.6 million in state-based programs such as Medicaid. It also had about 4.7 million specialty members for dental, vision and similar coverage.