Humana will lose money on its 2016 individual market health plans, and the health insurer expects up to 300,000 will drop their coverage by the end of this year, according to a Securities and Exchange Commission filing released late Friday.
It marks the second investor-owned insurer to publicly disclose the problems it is having with the Affordable Care Act's insurance markets. UnitedHealth Group has lost millions on the marketplace and said it may exit the exchanges by 2017 if things don't turn around.
Humana did not disclose details for the sharp drop in membership. However, Louisville, Ky.-based Humana has already lost thousands of members who didn't have proper naturalization or income documents, which forced the CMS to terminate coverage. Other exchange enrollees stopped paying their premiums. Humana also is phasing out its noncompliant ACA plans.
Specific numbers on the expected financial losses weren't outlined. Humana said it is evaluating the 2016 enrollment process and its “pricing assumptions,” which will result in a premium deficiency reserve.
“This evaluation includes membership changes resulting from its product discontinuances, changes by geography, age bands and metallic tier, and whether the new members who enrolled were previously covered by insurance,” the company said in the filing.
Approximately 814,000 people bought individual Humana plans on or off the exchanges, as of Sept. 30.
Humana's Medicare Advantage business—the core of the company—is expected to fare better this year. From 100,000 to 120,000 seniors and disabled people are expected to enroll in Humana's Medicare plans by the end of 2016, the company said. That would put Humana's Medicare membership at almost 3.4 million.
Humana also expects to add upward of 330,000 people to its Medicare prescription drug plans by year end.