Humana Sees Highest Membership Growth in Medicare Advantage Plan in a Decade


Humana (HUM) announced earnings of $2.28 per share for the fourth quarter and $17.80 for full year 2019. The Medicare Advantage (MA) company saw MA memberships grow at the highest pace in a decade, bringing in half a million new individual MA members.

Not only was new membership growth at record levels, but new members chose the highest level, and most profitable plans for Humana, at a record pace as well. MA membership in Florida alone grew 38% in 2019.

Citing significant milestones achieved in 2020, Humana president and CEO, Bruce Broussard, noted the company had:

  • Expanded senior-focused payer-agnostic primary care centers
  • Advanced home health care capabilities
  • Expanded pharmacy operations, and
  • Took significant steps toward creating an interoperable health ecosystem via technology partnerships

Related: Humana Unveils AI for Healthcare at Consumer Electronics Show

Mr. Broussard went on to note the five major strategic initiatives the company is focused on in 2020. These include “a member’s health journey, primary care, home, pharmacy, and social determinants of health and behavior.”

The company continued to expand its presence in stand-alone senior-focused primary health centers. Humana is using a combination of joint ventures and alliances with center operators to buttress its entry into the market, and share costs associated with building and managing senior facilities. 

Humana now operates a total of 262 senior health centers, adding 29 in 2019. And, during the earnings conference call, CEO Broussard noted the company has just announced a new partnership with Welsh, Carson, Anderson and Stowe (WCAS). 

Related: Joint Venture to Expand the Nation’s System of Value-Based Primary Care Centers Focused on Serving Medicare Patients

Under the partnership, Humana and WCAS will open 50 senior care centers over three years beginning in 2020. Each company has allocated $600 million toward the effort, with WCAS maintaining primary ownership and a third party managing the centers.

Commenting on the recent acquisition of Enclara, Broussard stated the acquisition had allowed Humana to “expand our comprehensive care continuum strategy to cover the pharmacy related needs associated with hospice care, simplify the mail-order pharmacy experience, and advance the technology stack for in-home pharmacy.”

Noting headwinds that will be caused by the return of the health insurance industry fee, or HIF, in 2020, Humana forecast earnings in the range of $18.25 to $18.75 per share. The company expects to add between 270,000 and 330,000 MA members over the course of this year. This would represent growth of between 7.5% and 9.2%. 

Stock of Humana initially jumped as much as 7% higher on the earnings announcement, before giving back some of those gains. The stock has traded essentially flat over the first month of 2020. 

Steven Adams’s personal position in Humana: none.

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