Humana to boost membership, efficiency of Medicare Advantage plans


Despite concerns that the federal government will reduce payments for Medicare Advantage plans, Humana isn't changing its strategy to expand its private Medicare business.

Humana CEO Bruce Broussard told The Wall Street Journal the insurer intends to increase membership and enhance efficiency in its Medicare Advantage plans.

For example, the insurer is considering providing more upfront intense care for its sicker members to help it do more with less while keeping the business strong. "Frankly if we're not doing that, we shouldn't be in business," Broussard said. "That's the responsibility we have."

The reform law will cut Medicare Advantage payments to levels closer to the traditional Medicare program by 2017. And since roughly 60 percent of Humana's earnings come from Medicare Advantage, the insurer is highly exposed to the volatility in payments coming from the federal government.

But Broussard believes Humana's chronic care program, including identifying and assessing members with chronic conditions like heart failure and diabetes early, will help Humana weather the storm of payment cuts. He said carefully managing chronic conditions at home help prevent expensive hospital and emergency room visits.

What's more, Broussard said that by handling budget constraints and marketing insurance directly to people will help the company build a stronger presence in other markets, such as dual patients and individual policyholders. "I really think that Medicare Advantage will be a large part" of the business going forward, Broussard added.

On the other hand, Humana's chief competitor in the Medicare Advantage market, UnitedHealth, is preparing for additional cuts to the program next year and will likely cut benefits, change provider networks or exit some markets to ensure its Medicare Advantage plans remain profitable, FierceHealthPayer previously reported.

To learn more:
- read the Wall Street Journal article

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