Hu­mana to fo­cus on Medi­care Ad­van­tage, Part D pa­tients

Modern Healthcare - - LATE NEWS - Alex Kacik

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.—

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