Humana to focus on Medicare Advantage, Part D patients
Humana will continue to focus on the growing population of seniors in the U.S., the insurer said during its annual shareholder meeting last week.
The company is celebrating a good fiscal year despite a failed $37 billion proposal to merge with Aetna and its decision to pull out of the individual insurance marketplace next year.
Humana CEO Bruce Broussard said during the meeting that it was “quite remarkable” how the company performed during the two years of merger talks, citing growth in revenue and membership for its primary demographic of Medicare Part D and Medicare Advantage patients.
A combined Humana and Aetna would have accounted for 25% of Medicare Advantage enrollment nationwide—more than UnitedHealthcare’s 21% of the Medicare Advantage population in 2016. Humana and Aetna ended merger talks in February after deciding not to appeal a federal court’s decision to block the deal on antitrust grounds.
Humana expects some financial fallout from its decision to exit the exchanges. The company had an operating loss of $1.37 per diluted common share in 2016 for its individual commercial business due to the company’s planned exit. Diluted earnings per common share dropped from $8.44 in 2015 to $4.07 in 2016, according to generally accepted accounting principles.
Humana projects an operating loss of approximately $45 million pretax, or $0.17 per diluted common share, for its individual commercial business in fiscal 2017 stemming from its decision to pull out of exchanges.—