Health insurance giant Humana Inc. (NYSE: HUM) on Wednesday highlighted the value of its home health care services businesses, its strong Medicare Advantage (MA) performance and better-than-expected third-quarter financial results.
Humana’s GAAP consolidated revenues for the third quarter of 2018 were $14.21 billion, an increase of $924 million, or 7%, from the previous year’s quarter. The favorable year‐over‐year comparisons were primarily driven by higher premium revenues from the company’s Medicare Advantage business, partially offset by lower revenues associated with the exit of the individual commercial business as of Jan. 1, 2018, according to the company.
From September 2017 to September 2018, the number of people who signed up for Humana’s individual Medicare Advantage plans jumped from about 2.8 million to about 3 million, an increase of nearly 7%.
Humana estimates individual MA plan membership to grow by up to 300,000 people in the coming year, according to CFO Brian Kane.
“We have anecdotal data that suggests we are taking marketshare from our competitors,” Kane said during a Wednesday conference call with investors. “It’s still very early, [but] we feel very good about the 250,000 to 300,000 member target that we put out, and obviously we’re working hard to drive growth above that range.”
Home care agencies throughout the United States have closely followed Humana and other MA insurers ever since the U.S. Centers for Medicare & Medicaid Services (CMS) announced in April that certain non-skilled in-home care services would be allowed as supplemental benefits under the MA program in 2019.
Amedisys (Nasdaq: AMED), LHC Group (Nasdaq: LHCG), Addus (Nasdaq: ADUS), the Visiting Nurse Service of New York and Senior Helpers are just a handful of the companies providing personal care services that have previously expressed their interest in MA opportunities to Home Health Care News.
Only 3% of MA plans will offer in-home support services such as personal care and housekeeping in 2019, according to a recent AARP analysis.
Anthem, Inc. (NYSE: ANTM) — a competitor of Humana on the MA market — is among the relatively sparse group of insurers to already publicly detail expanded supplemental benefits plans.
Kindred at Home progress
In addition to its strong MA performance, Humana leadership also briefly touched on its home health businesses and its capabilities to get ahead of patient health in the home setting during Wednesday’s call.
Humana and two private equity firms — TPG Capital and Welsh, Carson, Anderson & Stowe — closed on their $4.1 billion acquisition of Kindred at Home in July. Humana also oversees Humana at Home.
“We continue to invest in people, processes and technology to create a more local, personalized and simplified experience, while proactively managing health conditions,” Humana President and CEO Bruce Broussard said during the investor call. “We continue to make progress with Kindred at Home, and our efforts are already being felt by our members.”
There are “numerous examples” of Kindred at Home nurses in pilot programs identifying and addressing gaps in care, Broussard said, including addressing non-medical patient concerns that may cause them to forgo recommended pre- or post-acute treatment plans. In general, he said, Humana is focused on breaking down silos, empowering associates and encouraging partnering across the health care ecosystem.
Humana Chief Medical Officer Roy A. Beveridge recently highlighted the insurer’s home health strategy in an exclusive HHCN guest column.
Humana shares rose more than 5% on Wednesday, hitting an all-time high of $349.36 in morning trading, according to Reuters, which reported that the boost was also likely tied broader momentum in the health insurance sector following results from Tuesday’s U.S congressional elections.
The morning’s all-time high increased as the day moved on. Humana’s stock was up 5.98% Wednesday afternoon, trading at $351.84.
Third quarter 2018 net income rose to $901 million, or $4.65 a share, from $799 million, or $3.44 a share, in the same period a year ago, according to Humana.
Written by Robert Holly