Humana May Lead Aetna, Cigna in Medicare Advantage LTC Race

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Humana Inc. may have more energy to give to the new Medicare Advantage long-term care benefits market than two of its major competitors, Aetna Inc. and Cigna Corp.

That possibility emerged last week as the companies released their first-quarter earnings.

(Related: Medicare Advantage Plans Can Pay for Many LTC Services in 2019: Feds)

Aetna Inc. is being acquired by CVS Health Corp. Aetna has stopped holding quarterly earnings calls with securities analysts. Aetna did not talk about the new Medicare Advantage chronic care benefits opportunity in its earnings release. CVS executives did not talk about the new Medicare Advantage supplemental benefits rules during the CVS earnings call.

Cigna Corp. is acquiring Express Scripts Inc., a major pharmacy benefits manager. Cigna executives focused during their analyst mainly on discussing the Express Scripts deal. They did not talk about the new Medicare Advantage supplemental benefits rules.

Humana is not currently being acquired, or making giant deals of its own.

Humana's executives are talking, about the new Medicare Advantage chronic care benefits rules.

The Centers for Medicare and Medicaid Services announced April 27, in a memo, rules changes that could turn the Medicare Advantage program into a major provider of long-term care benefits.

The Medicare Advantage program gives private insurers a chance to provide an alternative to traditional Medicare coverage. CMS requires the issuers in the program to comply with strict benefits package rules. In the past, CMS has not let issuers use a “supplemental benefits” coverage option to cover services such as adult day care services.

A CMS official said in the April 27 memo that, starting with the 2019 plan year, CMS will let a Medicare Advantage plan issuer address the “social determinants of health” by covering almost any form of long-term care other than nursing home care. A plan issuer will be able to cover adult day care, and almost any form of home support other than meal delivery.

Humana said in its earnings release that the new rules should help Humana improve Medicare Advantage enrollees' health.

Bruce Broussard, Humana's president, made that point himself during Humana's earnings call.

“Social determinants of health” can have an obvious effect on Medicare Advantage enrollees' health, Broussard said.

“For example, a member who is food insecure may have to make decisions not to fill their prescriptions, so that they can buy food,” Broussard said. “If a member is not taking their needed medication on a regular basis, it is likely their health will deteriorate.

Humana and other carriers have to submit their final 2019 bid packages soon.

A securities analyst who participated in Humana's conference call asked Broussard whether Humana will have enough time to add chronic care benefits to its 2019 bid package.

“One of the things about the supplemental benefits is that the details are still coming out,” Broussard said. “So, what they are and how they will work is going to continue to need to be refined.”

But Humana has already been working with charitable organizations and other organizations to help enrollees affected by problems with the “social determinants of health,” and it feels it can use similar partnerships to provide the kinds of benefits described in the April 27 memo, Broussard said.

“We feel very, very equipped and capable as we look at both our clinical programs and the relationships in our communities,” Broussard said.

Earnings

Here's a quick look at how Aetna, Cigna and Humana did in the first quarter, in a nutshell.

Aetna

Aetna is reporting $1.2 billion in net income for the first quarter on $15 billion in revenue, compared with a $381 million net loss on $15 billion in revenue for the first quarter of 2017.

The company ended the quarter providing or administering major medical coverage for 22 million people, or about as many people as it was covering a year earlier.

The number of people with Aetna commercial coverage held steady at about 18 million.

Medicare Advantage enrollment increased to 1.5 million, from 1.4 million.

Cigna

Cigna is reporting $915 million in net income for the first quarter on $11 billion in revenue, up from $598 million in net income on $10 billion in revenue for the first quarter of 2017.

The company ended the quarter providing or administering major medical coverage for 16.2 million people, up from 15.7 million people a year earlier.

The number of U.S. residents with Cigna commercial coverage increased 4%, to 14.2 million.

Unlike many competitors, Cigna is still selling individual major medical coverage through the Affordable Care Act public exchange system. The company is selling coverage through the ACA exchange programs in Colorado, Illinois, Missouri, North Carolina, Tennessee and Virginia.

The total number of individual policy insureds increased to 401,000, from 353,000. The company says it ended the quarter with 348,000 ACA exchange enrollees; 13,000 customers with fully ACA-compliant coverage sold outside the ACA exchange system; and 40,000 customers with coverage purchased outside the ACA exchange system before January 2014, before many ACA benefits rules took effect.

Medicare Advantage enrollment fell to 433,000, from 441,000.

Humana

Humana is reporting $491 million in net income for the first quarter on $14 billion in revenue, compared with $1.1 billion in net income on $14 billion in revenue for the first quarter of 2017.

The company ended the quarter providing or administering major medical coverage for 17 million people, up from 14 million people a year earlier.

Commercial group enrollment fell to 1.5 million, from 1.6 million.

Medicare Advantage enrollment increased to 3.5 million, from 3.3 million.

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