Buoyed by growth in Medicare Advantage enrollment, Humana is the latest insurer to report solid fourth quarter profits as seniors flock to private coverage sold via contracts with the federal government.
The health insurance industry is tapping into a market of more than 10,000 baby boomers aging into the Medicare population every day. Humana is the latest insurer to report Medicare Advantage growth that is slightly ahead of the projected record growth the Centers for Medicare & Medicaid Services (CMS) predicted for Medicare Advantage last fall.
Following the recent open enrollment period, Humana expects 2019 individual Medicare Advantage membership “growth of 375,000 to 400,000 members, representing 12% to 13% growth,” the insurer reported Wednesday.
The additional membership comes as Humana and its historic rivals like UnitedHealth Group and Aetna expanded their Medicare Advantage offerings into new regions and several startup plans and new competitors emerged.
But Humana CEO Bruce Broussard said the insurer did a good job holding its own while taking Medicare Advantage business away from rivals he didn’t name during a Wednesday morning call to discuss earnings with analysts.
Medicare Advantage plans contract with the federal government to provide extra benefits and services to seniors, such as disease management and nurse help hotlines, with some even providing vision and dental care and wellness programs. CMS is changing regulations to allow Medicare Advantage plans to provide broader coverage in the future, which is also expected to boost enrollment. L.E.K. Consulting has projected Medicare Advantage enrollment will rise to 38 million, or 50% market penetration by the end of 2025.
Humana ended 2018 with 3.06 million individual Medicare Advantage members, which was up 7% from 2.86 million as of Dec. 31, 2017, the insurer said Wednesday. The performance helped the Louisville-based provider of health insurance and outpatient medical care increase net income to $436 million, or $2.58 per share in the fourth quarter of last year. That compares to $490 million, or $1.29 per share in the fourth quarter of 2017. Revenue rose to nearly $14.2 billion.
Date: Feb 06, 2019