Home-Focused Humana Sees Highest Medicare Advantage Growth in 10 Years

Humana Inc. (NYSE: HUM) is seeing Medicare Advantage (MA) growth like never before, a point that contributed to its strong second quarter performance. The home-focused health insurance giant only expects membership to continue to boom in the months to come, executives predicted on a Q2 earnings call Wednesday.

In Q2, Humana’s group MA membership was 519,100, up 5% from Q2 2018. Meanwhile, individual MA membership exceeded 3.48 million, up 15% year-over-year.

“[We’re] experiencing the highest individual Medicare Advantage membership growth we have seen in the last decade, which is reflective of our operating discipline and execution, investments in our integrated care delivery strategy and our relentless focus on creating a simple and personalized health care experience for our members,” CEO Bruce Broussard said on the call.


As a result, the Louisville, Kentucky-based insurer raised its full-year expected individual MA membership growth from 415,000 to 440,000 members to a range of 480,000 to 500,000 members for 2019. Age-ins and dual-needs beneficiaries are primarily expected to fuel the growth, Broussard said.

MA is becoming increasingly popular across the board, not just at Humana, as the Centers for Medicare & Medicaid Services (CMS) continues to give plans more flexibility.

In fact, in 2018, about 34% of all Medicare beneficiaries were enrolled in MA, up from only 22% in 2008, according to Kaiser Family Foundation statistics.


Broussard said the insurer’s retail segments — which includes MA — helped drive strong results for Q2.

Beating Wall Street expectations, Humana recorded a net income of $940 million in the quarter ended June 30, a 387% increase compared to $193 million in Q2 2018. Total revenue in the second quarter came in at $16.25 billion, an increase of 14%, or $1.99 billion, from $14.26 billion for the same period a year ago.

Humana at Home

While not explicitly stated by executives, one could assume Humana’s MA growth is due in part to beneficiaries’ interest in being cared for at home.

One factor sparking the recent increase in MA enrollment industry-wide is the addition of in-home non-medical supplemental benefits, which includes services such as home care and transportation.

Humana offers several of those benefits through partnerships with organizations such as Meals on Wheels and “grandkids on demand” startup Papa.

Meanwhile, Humana executives gave analysts more overt insights into its home-based initiatives on the call while discussing Kindred at Home.

“In the home, through our [40%] minority investment in Kindred at Home, we are piloting value-based care models in multiple markets and continue to see encouraging results from a stand-alone financial perspective for Kindred at Home and from the stand-point of developing improved clinical outcomes for our members,” Broussard said.

Humana and Kindred at Home have also invested in an interdisciplinary team of clinicians responsible for taking the best practices from the pilot markets and deploying them nationwide, Broussard added.

In value-based pilot markets, there have been 1,800 home health authorization episodes year-to-date, Broussard said, compared to 600 total in 2018. The expanded coverage area includes more than 90 Kindred at Home branches in six states: Georgia, Kentucky, North Carolia, South Carolina, Virginia and West Virginia.

“For the full year, we expect a total of nearly 20,000 home health episode authorizations under the new value-based model for both pilot markets and expanded coverage areas,” Broussard said.

About a week before the call, Broussard hinted that the insurer could be leaning even further into home and its focus on social determinants of health at a Medicare Advantage Summit hosted by the Better Medicare Alliance in Washington, D.C.

“[With home-based care,] you have this holistic view of the customer, so you can create an intervention based on personal needs, clinical needs and [personal] preferences,” Broussard said. “All of those, I think, will make a great health care system a decade from now.”

Companies featured in this article:

, , , , ,