Humana Inc., an insurer that made a major push into the ordinary individual major medical market starting in 2002, is now unhappy with its dwindling operations in that market.
The Louisville, Kentucky-based company has only 152,000 enrollees left in Affordable Care Act exchange plans, and about 90,000 in individual policies sold before key ACA individual health product rules took effect, in January 2014. The number of individual coverage insureds is down from 655,000 at the end of 2016.
But Humana said today it expects to lose $45 million on its individual major medical business in 2017 on about $875 million in revenue. The loss could average about $180 per individual insured.
Brian Kane, Humana's chief financial officer, said the actual individual commercial loss could be higher than the current estimate.
About half of Humana's current individual coverage insureds are new to Humana, and about half are customers who had Humana coverage in 2016 and chose to stick with Humana coverage in 2017, Kane said.
Very early prescription use numbers and hospital admission numbers are higher than what Humana had expected, Kane said.
"That number is something we're going to have to evaluate," Kane said. "We will continue to watch this closely."
The company plans to get out of the individual market entirely in 2018.
Humana expects to lose $45 million or more on its individual major medical business in 2017. (Photo: iStock)
Kane talked about the ACA exchange system during a conference call Humana held to go over its fourth-quarter earnings, its expectations for 2017, and other topics with securities analysts.
Humana had traditionally held calls with analysts to go over its earnings each quarter. The company suspended the calls while it was trying to get acquired by Aetna Inc. Now that the companies have given up on trying to complete the deal, Humana has gone back to holding analyst calls.
