Humana Inc. (NYSE:HUM) says it will eliminate some individual major medical offerings in 2016 and is not sure how it will serve the individual market in 2017.
Humana discussed its concerns about the state of the individual health insurance market Friday, when it released its third-quarter earnings.
See also: Moda shrinks, Aetna rises, analysts watch
Individual claims have been higher Humana expected, in part because enrollees have been making heavy use of emergency room services and out-of-network providers.
Because claims have been so high, the individual commercial medical business has been losing money this year, the company said.
The company is responding by reducing the number of individual products it will offer in 2016, both inside the Patient Protection and Affordable Care Act (PPACA) exchange system and outside the PPACA exchange system. Some of the products dropped will be broad-network plans and platinum-level exchange plans.
The plan cuts could affect about 100,000 people, Humana said.
“The deterioration in claims experience for this line of business in [the third quarter of] 2015, if it continues, would reduce the likelihood of achieving the level of profitability the company had previously anticipated for this business in 2016,” Humana said. “The company continues to evaluate its participation in this line of business for 2017.”
Aetna Inc. (NYSE:AET) hopes to acquire Humana sometime between June 30, 2016, and Dec. 31, 2016, and Humana has stopped holding routine earnings conference calls with securities analysts while the deal is pending.