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Life Health > Long-Term Care Planning

Humana may lose $180 per 2017 ACA exchange enrollee

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Humana Inc., an insurer that made a major push into the ordinary individual major medical market starting in 2002, is now unhappy with its dwindling operations in that market.

The Louisville, Kentucky-based company has only 152,000 enrollees left in Affordable Care Act exchange plans, and about 90,000 in individual policies sold before key ACA individual health product rules took effect, in January 2014. The number of individual coverage insureds is down from 655,000 at the end of 2016.

Related: Humana faces $401 million loss, and Medicare headaches

But Humana said today it expects to lose $45 million on its individual major medical business in 2017 on about $875 million in revenue. The loss could average about $180 per individual insured.

Brian Kane, Humana’s chief financial officer, said the actual individual commercial loss could be higher than the current estimate.

About half of Humana’s current individual coverage insureds are new to Humana, and about half are customers who had Humana coverage in 2016 and chose to stick with Humana coverage in 2017, Kane said.

Very early prescription use numbers and hospital admission numbers are higher than what Humana had expected, Kane said.

“That number is something we’re going to have to evaluate,” Kane said. “We will continue to watch this closely.”

The company plans to get out of the individual market entirely in 2018.

Humana said today it expects to lose $45 million on its individual major medical business in 2017. (Photo: iStock)Humana expects to lose $45 million or more on its individual major medical business in 2017. (Photo: iStock)

Kane talked about the ACA exchange system during a conference call Humana held to go over its fourth-quarter earnings, its expectations for 2017, and other topics with securities analysts.

Humana had traditionally held calls with analysts to go over its earnings each quarter. The company suspended the calls while it was trying to get acquired by Aetna Inc. Now that the companies have given up on trying to complete the deal, Humana has gone back to holding analyst calls.

Related: Aetna and Humana break up

Humana reported Feb. 8 that it lost $401 million in the fourth quarter of 2016 on $13 billion in revenue. Some of the loss was due to previously announced problems with collecting payments from the Affordable Care Act risk corridors program, and some was due to a contribution to the reserves backing an old, closed block of long-term care insurance business. The company did not hold a conference call at that time.

Humana is a major provider of Medicare Advantage plans and Medicare drug plans.

Bruce Broussard, Humana’s chief executive officer, said during the conference call that Humana wants to focus mainly on managing and providing integrated care for older people with chronic conditions and expanding its Medicare drug plan business. The company also wants to continue to offer group coverage to small and midsize employers.

Even if Humana were getting better results from the ordinary individual commercial business, it might want to move away from that market, Broussard said.

“I think what we do well is serving people with chronic conditions,” Broussard said.

Broussard said Humana is especially interested in finding ways to help seniors with the company’s health care services operations and ability to analyze and manage care.

The current structure of the ACA individual market is not a good fit for that strategy, Broussard said.


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