Humana Seeks to Calm Investors With EPS Outlook; United, Anthem on Sure Footing

by Lauren Flynn Kelly

As publicly traded Medicare Advantage insurers begin to report fourth-quarter and full-year 2021 earnings, Humana Inc.’s recent disclosure of lower-than-expected individual MA growth for 2022 has raised questions among the investment community around the use of external sales channels and their impact on membership churn. But reports by UnitedHealth Group and Anthem, Inc. in late January seemed to assure investors that Humana’s experience was not reflective of an overall trend. 

Humana adjusts membership projections 

• Humana Inc. on Feb. 2 posted earnings per share (EPS) of $1.24 for the quarter and $20.64 for the full year — both slightly above the company’s expectations — and reaffirmed its previously downgraded projection of MA enrollment growth of 150,000 to 200,000 individuals in 2022. 
• During prepared remarks, President and CEO Bruce Broussard said the company will apply lessons learned from the recent AEP to “further optimize our investment in marketing to ensure our messages are heard by more prospective customers…and focus on experience of our existing members to improve retention.”  
• The company’s use of third-party marketers prompted multiple questions from analysts, including one who asked whether the company pulled back some of its marketing materials after CMS issued its “Third-Party Marketing” memorandum just days away from the start of the AEP. 
• Chief Legal Officer Joseph Ventura responded that Humana performed “a variety of channel checks” with its partners to make sure the insurer wasn’t an outlier in terms of compliance — and confirmed it was not — and to ensure that its members know what they are purchasing when engaging with external channels. 

United maintains 2022 outlook while Anthem beats expectations 

• Reporting earnings on Jan. 19, UnitedHealth Group said growth across its Optum and UnitedHealthcare businesses contributed to an 11.8% revenue increase. 
• “Given the steady strides we’ve made in quality performance, we have the opportunity to enroll people in our newly rated 5-star plans throughout the entirety of this year,” noted UnitedHealth Chief Financial Officer John Rex, according to a Motley Fool transcript of the company’s earnings conference call. 
• Consistent with projections given in November, the company said it expects adjusted net EPS in the range of $21.10 to $21.60 and revenues of $317 billion to $320 billion in 2022.  
• Reporting fourth-quarter and full-year 2021 earnings on Jan. 26, Anthem, Inc. said a double-digit organic MA enrollment increase and suspended redetermination efforts in its Medicaid markets were two factors that helped drive year-over-year growth of 16.8%, or 2.2 million lives, in its government business.  
• During the company’s earnings call, CEO Gail Boudreaux suggested that supplemental benefits such as personal home health and prepared meal delivery continued to attract and retain members. 
• “Offering flexible and personalized benefits will remain a key part of our approach in individual MA, and we expect ongoing enhancements to power another year of double-digit growth in 2022,” she said, according to an AlphaStreet transcript of the earnings call. 

From Radar on Medicare Advantage

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