Over the next 18 to 24 months, Humana is exiting the commercial health plan business to focus on government-funded programs, like Medicare Advantage, and specialty businesses.
Humana will move out of commercial plans over the next 18 to 24 months and focus more on government-funded programs and specialty businesses. Included in the business Humana is leaving are all fully insured, self-funded, and Federal Employees Health Benefits medical plans.
The company announced the move after a strategic review that determined the Employer Group Commercial Medical Products business was no longer in a position to “sustainable meet the needs of commercial members over the long term,” according to a press release.1
“This decision enables Humana to focus resources on our greatest opportunities for growth and where we can deliver industry leading value for our members and customers,” Bruce D. Broussard, Humana’s president and CEO, said in a statement. “It is in line with the company’s strategy to focus our health plan offerings primarily on government-funded programs (Medicare, Medicaid and Military) and specialty businesses, while advancing our leadership position in integrated value-based care and expanding our CenterWell health care services capabilities.”
In late 2022, Humana announced that it was expanding CenterWell, which offers payer-agnostic, senior-focused primary care services. The plan to expand CenterWell includes adding new centers in Indiana, Kentucky, Louisiana, Mississippi, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia.2
As of September 30, 2022, Humana had 8.7 million Medicare members in all 50 states, as well as Washington, DC, and Puerto Rico. In addition, more than half (5.1 million) of those members were enrolled in a Medicare Advantage (MA) plan.3
The news of Humana’s move comes just days after a new report highlighted the growth of MA plans. Health care consulting group Chartis found that while MA growth had slowed this year compared with the 3 previous years, overall participation in the program still grew by 5.5%, or an additional 1.5 million beneficiaries.4 There is now a record 29.5 million individuals enrolled in MA plans with 46% of all Medicare beneficiaries enrolled in MA. In comparison, 37% of all Medicare beneficiaries were in MA plans in 2019.
In the report, Humana was mentioned as one of the drivers of MA growth. UnitedHealthcare led the way, accounting for 55% of market growth, Chartis reported, followed by Humana, which accounted for 23% of growth. From 2022 to 2023, Humana’s enrollment in MA grew 6.8%.
“While these 2 health plans often led in years past, this increase reflects considerably more concentrated performance,” according to the report.
Chartis also highlighted the importance of CMS’ star ratings on enrollment. Health plans with increasing quality had enrollment gains and, overall, 73% of MA beneficiaries are in health plans that have 4 stars or better. Similarly, Humana reported that 96% of all of Humana’s MA members are enrolled in plans that have 4 stars or above.5
The fact that MA plans cover extra benefits, like dental, vision, fitness memberships, and more, make them very attractive to Medicare beneficiaries and has contributed to the popularity and rapid growth of these plans, Dennis Scanlon, PhD, professor of health policy and administration, Pennsylvania State University, told The American Journal of Managed Care® in an interview.
Despite their popularity, there are downsides to MA plans. Kaiser Family Foundation found that in 2022, 99% of MA enrollees are in plans that require prior authorization for some services.6 Not only is PA often required for expensive services, such as Part B drugs and skilled nursing facility stays, but it is required for the majority of enrollees for some of those extra benefits, such as dental services and hearing and eye exams.
“In contrast to Medicare Advantage plans, traditional Medicare does not generally require prior authorization for services and does not require step therapy for Part B drugs,” the authors noted.
1. Humana to exit employer group commercial medical products business. News release. Humana. February 23, 2023. https://press.humana.com/news/news-details/2023/Humana-to-Exit-Employer-Group-Commercial-Medical-Products-Business/default.aspx
2. CenterWell senior primary care 2023 expansion plan includes new markets of Indiana, Mississippi, and Virginia. News release. Humana. November 16, 2022. Accessed February 23, 2023. https://press.humana.com/news/news-details/2022/CenterWell-Senior-Primary-Care-2023-Expansion-Plan-Includes-New-Markets-of-Indiana-Mississippi-and-Virginia/default.aspx
3. U.S. News and World Report names Humana 2023 best overall Medicare Advantage plan company. News Release. Humana. November 10, 2022. Accessed February 23, 2023. https://press.humana.com/news/news-details/2022/U.S.-News-and-World-Report-names-Humana-2023-Best-Overall-Medicare-Advantage-Plan-Company/default.aspx
4. Herro N, Pathiyal A, Wokurka J. In a shifting market, Medicare Advantage shows continued—but decelerating—growth. Chartis. February 21, 2023. Accessed February 23, 2023. https://www.chartis.com/insights/shifting-market-medicare-advantage-shows-continued-decelerating-growth
5. 96% of Humana’s Medicare Advantage members are in contracts rate 4-star or above for 2023; 66% are in contracts rated 4.5-star or higher. News release. Humana. October 7, 2022. Accessed February 23, 2023. https://press.humana.com/news/news-details/2022/96-of-Humanas-Medicare-Advantage-Members-are-in-Contracts-rated-4-Star-or-Above-for-2023-66-are-in-Contracts-Rated-4.5-Star-or-Higher/default.aspx
6. Freed M, Fuglesten Biniek J, Damico A, Neuman T. Medicare Advantage in 2022: premiums, out-of-pocket limits, cost sharing, supplemental benefits, prior authorization, and star ratings. Kaiser Family Foundation. August 25, 2022. Accessed February 23, 2023. https://www.kff.org/medicare/issue-brief/medicare-advantage-in-2022-premiums-out-of-pocket-limits-cost-sharing-supplemental-benefits-prior-authorization-and-star-ratings/