Another big health insurer has released fourth-quarter earnings, and a little more information about what the new world created by the Patient Protection and Affordable Care Act (PPACA) is really like.
Humana Inc. (NYSE:HUM) put details on enrollment in PPACA exchange qualified health plans (QHPs) and enrollment in new, PPACA-compliant individual coverage sold outside the PPACA exchange system right alongside details about enrollment in Medicare Advantage plans, fully insured commercial group plans and other types of plans.
The company also gave estimates of the possible effects of the PPACA “three R’s” risk-management programs. Those programs include:
A temporary reinsurance program, which is supposed to protect individual coverage issuers against the cost of covering enrollees with very high medical bills.
A temporary risk corridors program, which is supposed to use cash from carriers with strong underwriting results to help carriers with weak results.
A permanent risk-adjustment program, which is supposed to shift money from plans with enrollees with low claim risk scores to plan with enrollees with high risk scores.
Bruce Broussard, Humana’s president, emphasized that Humana is trying to get away from relying on the three R’s programs this year by increasing individual health coverage premiums.
“We’ve been very disciplined there,” Broussard said during a conference call with securities analysts.
Humana said it plans to let higher prices drive total on-exchange and off-exchange individual commercial health insurance enrollment down about 9 percent to 10 percent this year, to about 931,200.
Humana is reporting $145 million in net income for the latest quarter on $12 billion in revenue, compared with a $30 million net loss on $10 billion in revenue for the fourth quarter of 2013.
See also: PPACA pays off for insurers
The company ended the quarter providing or administering medical coverage for 14 million people, up from 12 million a year earlier.
For a look at what Humana and its executives have been saying about the effects of PPACA, read on.
1. Self-insured plan enrollment shrank.
Before major PPACA commercial health insurance changes took effect in January 2014, some observers predicted that employer plan flight from PPACA group health changes would increase employers’ use of self-insurance.
Anthem Inc. (NYSE:ANTM), for example, recently reported that enrollment in the self-insured employer plans it administers increased 12 percent between the end of 2013 and the end of 2014, to 23 million.
At Humana, fully insured group plan enrollment held steady at about 1.2 million.