Humana says it will drop commercial employer-sponsored health insurance and hopes to grow through government programs - Health News

Humana's headquarters on Main Street in Louisville

Kentucky Health News

Louisivlle-based Humana Inc., which originated as a nursing-home company 60 years ago, then became a hospital company and then a health-insurance company, is planning to transform itself again – into a compaany that offers general health insurance only through government plans: Medicare Advantage, Medicaid and the military plan.

Humana announced Thursday that it would stop providing employer-sponsored commercial coverage, including self-funded and Federal Employee Health Benefit plans, over the next 18 to 24 months. "Humana will still provide insurance through its military service business," reports Tom Murphy of The Associated Press. "It also will still provide employer-sponsored specialty coverage like vision and dental benefits."

Humana covers more than 13 million people, but fewer than 1 million are in employer-sponsored health insurance, not counting the Tricare plan for active-duty service members, families and retirees, which has an enrolment of nearly 6 million.

“This decision enables Humana to focus resources on our greatest opportunities for growth and where we can deliver industry leading value for our members and customers,” President and CEO Bruce Broussard said. “It is in line with the company’s strategy to focus our health plan offerings primarily on government-funded programs . . . ”

Half of Kentuckians on Medicare have Advantage plans, in which the federal government pays the insurer a flat fee per enrollee, creating an incentive for the insurer to limit the cost of claims. Managed-care Medicaid plans, like those Humana and other insurers have in Kentuckym, are funded likewise.

"Employer-sponsored enrollment growth has largely slowed for insurers, including market leaders like UnitedHealthcare," Murphy reports. "Companies have turned more to government-backed coverage like Medicare Advantage or Medicaid for growth. They also have pushed deeper into managing prescription drug plans and providing care in order to control health-care costs."

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