Touting "the highest
individual Medicare Advantage growth we've seen in the last decade,"
Humana Inc. CEO Bruce Broussard said during a second-quarter earnings call on
July 31 that he is confident of long-term growth for his company's MA HMO, PPO
and Special Needs Plan for Medicare/Medicare dual eligibles (D-SNP) offerings.
The Louisville, Ky.-based
company raised its full-year 2019 guidance, yet underscored, as it did in its
first-quarter earnings call, that the expected return of the Affordable Care
Act's health insurer fee (HIF) for 2020 is looming large.
Citi's Ralph Giacobbe
took up the issue of medical loss ratios (MLRs). He told investors that
Humana's "core retail MA segment posted an impressive quarter highlighted
by better-than-expected MLR (85.2% vs consensus of 86.8%), an encouraging sign
given softer MLR performance across most peers thus far and in light of the
strong enrollment growth this year."
Indeed, Humana raised its
full-year 2019 individual MA membership growth guidance to a range of 480,000
to 500,000. Enrollment in its D-SNP increased by about 46,000 members.
Importantly, Humana's
"outsized member growth [of about 16%, double the market rate] doesn't
appear to be a mispricing stumble," Jefferies analyst David Windley
advised investors. And Oppenheimer & Co.'s Michael Wiederhorn said Humana's
"rapid growth continues to overshadow the looming HIF headwind for 2020."
With Medicare Part D,
Humana now expects a decline of 700,000 members this year in its stand-alone
Prescription Drug Plan business, at the low end of the expected range, due to
"slightly less disenrollment," Humana Chief Financial Officer Brian
Kane said.
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