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Humana rides high in third quarter on Medicare Advantage revenue and membership growth

Other insurers, such as Cigna and Anthem, also reported gains in their MA business during the third quarter.

Susan Morse, Senior Editor

Humana is the latest insurer to report earnings gains during the third quarter driven by its Medicare Advantage business.

Humana earned $901 million, compared to $799 during the third quarter a year ago. Total earnings this year are $1.6 billion.

Solid membership and earnings growth in 2018 are paving the way for significant MA growth of at least 250,000 members in 2019, said CFO Brian A. Kane.

Greater Medicare membership than expected, coupled with higher per member, per month premiums, have enabled Humana to increase its revenue guidance to a range of $47.8 billion to $48.1 billion from its previous range of $47.5 billion to $48 billion, Kane said.

Ninety-three percent of MA members will see no premium change or will get a reduction in their premium. Over 50 percent will have zero pay premium plan.

Humana received a 5-star rating for two Medicare Advantage contracts offered in Florida and Tennessee, and a 4.5-star rating for two MA contracts in Florida, Illinois, Kentucky, Mississippi, North Carolina, and Oregon.


MA plans are an attractive business for insurers.

Higher star ratings result in bonuses, and are an important member recruitment tool.


Other insurers, such as Cigna and Anthem last week, reported gains in their MA businesses.


Humana Pharmacy was ranked number one in customer satisfaction for U.S. mail order pharmacies in the J.D. Power 2018, U.S. Pharmacy Study, according to CEO Bruce Broussard.

Humana's medication reconciliation program, implemented three years ago, is helping to prevent hospital readmissions and adverse drug events and is generating savings. Clinicians have caught drug interactions, duplicate therapies, missing therapies, incorrect therapies and side effects.

In the beginning, it took three months to complete 500 medication reconciliations. It can now be done in three days with the use of technology, Broussard said.

A value-based care model with primary care physicians includes Humana's wholly-owned Partners in Primary Care clinics. At one of these clinics, a high-risk patient with elevated A1C for diabetes frequently missed his appointments. Clinic staff determined that while he understood he was at high risk of heart attack, stroke, kidney failure and losing his vision, he could not afford the $15 copay for the office visit, medication co-pays or healthy foods.

The clinical staff helped him to find low-income subsidies for prescription drugs, housing and his power bill, and directed him to food pantries and the Supplemental Nutrition Assistance Program.

The patient indicated the savings to his budget were life-changing, said Broussard, who credited Humana's integrated care delivery model.

Humana's Medicaid membership in 2019 is expected to grow by 120,000 to 140,000 members, primarily reflecting the expansion into new regions with a Florida contract award.

Humana will soon launch a center for Digital Health and Analytics in Boston called Humana Studio H. Heather Cox has been named to the newly created position of chief digital health and analytics officer.


"We are pleased with the initial positive response to our individual Medicare Advantage offerings for 2019. Meaningful tailwinds, including tax reform and the health insurance industry fee moratorium for 2019, allowed us to invest in benefits for our members and offer competitive Medicare Advantage products which are expected to drive significant membership growth and a year-over-year adjusted EPS increase in excess of our long-term growth target," Kane said.

Twitter: @SusanJMorse
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