HUMANA INSURANCE COMPANY

  • Overview

Medicare has made Humana a big-time player in the health insurance game. One of the country's largest Medicare providers and a top health insurer, Humana provides Medicare Advantage plans and prescription drug coverage to more than 5 million members throughout the US. It also administers managed care plans for other government programs, including Medicaid plans in Florida and Puerto Rico and TRICARE (a program for military personnel) in 10 southern states. Additionally, Humana offers commercial health plans and specialty (life, dental, and vision) coverage; it also provides health management services and operates outpatient care clinics. All told, it covers more than 12 million health plan members in the US.

Geographic Reach

Humana has expanded the geographic reach of its Medicare plans, and now has at least one Medicare product available in every state in the US, with its largest markets located in the southern and midwestern US (including Florida, Texas, and Kentucky).

Operations

Some three-fourths of Humana's sales come from government program (primarily Medicare) premiums. Most Medicare sales are made through the retail operating segment (about half of revenues), which also includes some commercial individual health plans (including HMOs and PPOs) and the company's specialty benefits unit, which provides dental, vision, life, and third-party administration services to more than 8 million customers. The employer group segment (20% of sales) sells some Medicare policies; however, the division's revenues primarily come from the sale of commercial health plans (including HMOs and PPOs) to corporate accounts on a fully-insured basis or an ASO (administrative services only) basis.

Humana's health and well-being segment accounts for about a quarter of sales and provides wellness programs that encourage its members to make healthy lifestyle choices. The division includes businesses that offer behavioral health and disease management services (under the LifeSynch brand), pharmacy benefit management (PBM) services, and mail-order pharmacy (RightSourceRx) services. The segment also includes the Concentra subsidiary, which operates some 300 urgent care medical centers and 260 workplace health clinics across the US, as well as the Humana Cares and SeniorBridge units, which provide home health and chronic care services for seniors. 

Financial Analysis

Humana's aggressive and creative expansion strategies have led to positive financial growth. The firm has experienced climbing revenues each year over the past decade, including a 6% increase to $39 billion in 2012 from increased membership levels (leading to higher premium revenues) in both the retail and employer group segments. Humana's profits dropped 14% in 2012, however, to some $1.2 billion after several years of growth; the decrease in net income was attributed to higher benefit expenses, especially in the Medicare businesses.

Strategy

Humana climbed the ranks to become a top Medicare plan provider by aggressively pursuing organic and acquisitive growth efforts within its government segments. It is ambitious in its retail marketing efforts to sign up Medicare recipients for its Medicare Advantage and Part D prescription plans. 

Additionally, the company works to maintain its competitive edge by forming partnerships with other health care-related companies. After experiencing sharp reductions in the number of Medicare prescription drug plan (PDP) members due to competition, the company found renewed success by partnering with Wal-Mart to offer low-premium PDPs in 2011. In addition, in 2012 Humana partnered with Medicaid provider CareSource to provide services to dual-eligibility Medicare/Medicaid members.

While the company remains focused on Medicaid expansion, Humana is also diversifying its revenue stream to reduce its dependence on government operations, which leave the company vulnerable to challenges including reimbursement cuts and contract disputes. Humana aims to attract commercial customers by offering new individual major medical plans, affordable consumer-directed products, and coverage options for small businesses.

Humana is also working to widen its wellness and care coordination offerings, which are increasingly popular with clients as a means of controlling health spending levels and improving the quality of care. Towards that end, Humana joined forces with South African firm Discovery Holdings in early 2011 to form HumanaVitality, which now provides wellness management services to Humana's commercial members (and will eventually serve Medicare patients as well). Humana is also expanding its chronic care and disease management programs.

Mergers and Acquisitions

In 2012 the company expanded its Medicare Advantage operations in the western US through two acquisitions (MD Care and Arcadian Management Services), adding more than 65,000 members through the deals.

Expansion efforts within the health and well-being segment include the purchases of health care IT firm Anvita Health (2011), which makes analytics software to identify gaps and safety concerns in member care; Harris, Rothenberg International (2012), which offers customizable work/life services and employee assistance programs; Certify Data Systems (2012), a health information exchange (HIE) provider; and SeniorBridge (2012), which offers chronic care services to seniors in their homes.

Also in 2012 Humana acquired Florida-based Metropolitan Health Networks, which provides care coordination services for Medicare and Medicaid customers, in a deal valued at $850 million. The Metropolitan business was also added to the health and well-being segment.

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HUMANA INSURANCE COMPANY


1100 Employers Blvd
Green Bay, WI 54344-0002
Phone: 1 (502) 580-1000
Fax: 1 (920) 3375432

STATS


  • Employer Type: Unknown
  • Md, Sr V Pres: Roy Beveridge
  • Sr V Pres: Jody Bilney
  • Exec V Pres: James Murray

Major Office Locations

  • Green Bay, WI

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