Humana to depart 13 Medicare Advantage markets

Humana previewed its Medicare Advantage strategy for the coming plan year, including a decision to quit 13 counties where performance has been unsatisfactory, at the Wells Fargo Healthcare Conference on Wednesday.

The Medicare Advantage heavyweight, which had 6.2 million members in those plans as of the second quarter, expects to lose a few hundred thousand enrollees in 2025 as it prioritizes profitable markets, Chief Financial Officer Susan Diamond told investors at the event in Everett, Massachusetts.

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In addition to leaving those 13 counties, Humana will offer fewer plans in some other areas, Diamond said. About 560,000 members will have to choose new policies for 2025, most of whom will have other Humana plans available to them, she said.

“The exit itself is positive in the sense that those plans were not contributing. And so just exiting, even if we don't retain the members, is positive,” Diamond said.

Diamond did not specify what markets will be affected, but Humana will continue selling Medicare Advantage plans in every state. The company is committed to a presence in certain favorable regions, including south Florida, she said.

Humana also is focused on its dual eligible special needs plans for people enrolled in both Medicare and Medicaid and on its Humana Honor plans for military veterans, Diamond said.

The insurer expects enrollment to be flat in the markets where it will offer Medicare Advantage plans, Diamond said. In fact, that's deliberate, she said.

“It was not that we couldn't see better results than that, and we couldn't grow,” Diamond said. “It's just we wanted to make sure with the earnings progression that we were trying to achieve that was not dependent on driving industry-average growth.”

Humana will provide brokers information on members who will be most affected by plan changes and is adding staff to its call centers in anticipation of an uptick in inquiries.

In addition to the geographic realignment, Humana is scaling back benefits and raising premiums to improve margins, CEO Jim Rechtin said in July.

“There's going to be a lot of frustration over the absolute level of changes across the board," Diamond said. "They will go through the process even if they are frustrated by the level of benefit change we made. If, in fact, that plan is still the best option, they will stay typically in the plan.”

Medicare Advantage carriers have been pummeled by higher medical costs and utilization since last year. Like other insurers, Humana has experienced higher inpatient utilization, although Diamond said recent data show the trend is stabilizing.

Humana's net income declined 29.2% to $679 million during the second quarter as revenue increased 10.4% to $29.5 billion, the company reported in July.