Humana To Invest $1 Billion In Medicare Advantage Business After Enrollment Comes Up Short

Humana stated it’ll spend $1 billion to “fund progress and funding” in its Medicare Benefit enterprise following a disclosure the well being insurer would add fewer seniors to such plans than anticipated for 2022.

The announcement got here Wednesday as a part of the health insurer’s fourth quarter 2021 earnings report that confirmed a $60 million loss, which was narrower than the year-ago interval’s $458 million loss. Revenues grew 10% to $21 billion in comparison with $19 billion within the year-ago interval.

Humana is a giant participant in Medicare Benefit plans that contract with the federal authorities to offer additional advantages and companies to seniors, comparable to illness administration and nurse assist hotlines with some additionally providing imaginative and prescient, dental care and wellness packages.

However Humana final month stunned traders and the trade by disclosing it was “decreasing its web membership progress estimate for its particular person Medicare Benefit merchandise for the yr ended December 31, 2022 to a variety of 150,000 to 200,000 members from the earlier vary of 325,000 to 375,000 members.” That revised estimate was attributed to “larger than anticipated terminations” throughout the annual open enrollment interval.

To return to progress, Humana stated it’ll decide to “performing a important overview of ongoing strategic initiatives throughout the corporate” together with analysis of its actual property portfolio.

“It will create capability to fund progress,” Humana chief govt Bruce Broussard informed analysts Wednesday morning throughout a name to debate earnings. “We’re pushing the group to be extra environment friendly.”

Humana’s slower-than-expected progress in its Medicare Benefit enterprise comes throughout maybe essentially the most aggressive time within the historical past of this system on account of new plans coming into the enterprise providing seniors an unprecedented variety of selections. Established rivals like UnitedHealth Group, CVS Well being’s Aetna medical health insurance unit are increasing into new markets whereas a flurry of startups and smaller well being insurers have entered the enterprise, seeing a market of greater than 10,000 Individuals a day turning 65 years previous and turning into eligible for Medicare and Medicare Benefit particularly.

Broussard additionally stated it’s taking steps to make Humana’s Medicare Benefit choices extra engaging to seniors by enhancing healthcare companies the plans provide. Humana final month disclosed plans to develop its physician-staffed major care clinics into three extra states, growing to greater than 240 the variety of such facilities the well being insurer operates by the tip of this yr.