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Humana predicts 2016 losses in individual market

SEC filing shows insurer may see commercial medical memberships drop by by 200K to 300K

Humana is expected to record financial and membership losses tied to its Affordable Care Act plans, according to a new filing with the U.S. Securities and Exchange Commission (SEC), though the insurance giant does expect gains in Medicare Advantage.

Based on results for the 2016 healthcare exchange open enrollment period, Humana expects its commercial medical memberships to decline by 200,000 to 300,000 this year. This membership expectation takes into account plans compliant with the ACA, both on and off exchanges, and non-ACA-compliant plans, the the filing says.

Because of the predicted loss of commercial medical memberships in 2016, Humana expects to record a premium deficiency reserve for its 2016 individual commercial medical memberships that are ACA-compliant. The company is currently comparing its pre-2016 assumptions about the open enrollment season with the actual number of individual commercial members that have enrolled in its ACA-compliant products thus far.

In an article in BloombergBusiness, Ana Gupte, an analyst with Leerink Partners, said these results mean that Humana could be expected to exit the federal marketplace in 2017 and focus on its Medicare Advantage options.

This would not be the first insurance giant that is thinking of jumping ship from the ACA exchanges, as UnitedHealth revealed that after reviewing its 2015 earnings, it will reconsider its participation in individual exchanges, FierceHealthPayer reported. Other insurers, such as Cigna, have said the government needs to allow more flexibility in how insurers design ACA-compliant plans.

Despite somewhat ominous commercial numbers, there is good news for the insurer. Humana predicts that in 2016 it will gain 100,000 to 120,000 individual Medicare Advantage plan members. Additionally, it expects in its stand-alone prescription drug plan membership for the same period to grow by 300,000 to 330,000 members.

To learn more:
- here is the SEC report
- read the BloombergBusiness article

Related Articles:
Losses lead UnitedHealth to rethink role in ACA exchanges
Cigna CEO: ACA marketplace needs to offer flexibility to insurers
HHS: 9.5 million Americans have health insurance from public exchanges