Wednesday, March 01, 2023
Humana Inc., announced that it will be exiting the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs. No other Humana health plan offerings are materially affected. The company remains committed to the long-term growth of its core Insurance lines of business, including Medicare Advantage, Group Medicare, Medicare Supplement, Medicare Prescription Drug Plans, Medicaid, Military and Specialty (Dental, Vision, Life, etc.), as well as its CenterWell healthcare services business.
Following a strategic review, the company determined that the Employer Group Commercial Medical Products business was no longer positioned to sustainably meet the needs of commercial members over the long term or support the company’s long-term strategic plans. The exit from this line of business will be phased over the next 18 to 24 months. The company is committed to ensuring a smooth transition of services for members and commercial customers.
“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,” said Bruce D. Broussard, Humana’s President and Chief Executive Officer. “It is in line with the company’s strategy to focus our health plan offerings primarily on Government-funded programs (Medicare, Medicaid and Military) and Specialty businesses, while advancing our leadership position in integrated value-based care and expanding our CenterWell healthcare services capabilities. We are confident in Humana’s continued success, and our commitment to improving the health of those we serve is unwavering.”
Financial results for Employer Group Commercial Medical Products will be adjusted for non-GAAP purposes going forward and are not expected to impact the company’s full year 2023 Adjusted earnings per share (EPS) guidance.
Based on the seasonality of Employer Group Commercial Medical Products earnings, the company now expects first-quarter 2023 earnings to represent approximately 33 percent of full-year 2023 Adjusted EPS, after considering the non-GAAP treatment of the Employer Group Commercial Medical business. This compares to the approximately 35 percent estimate previously disclosed, which did not take into account the non-GAAP treatment of Employer Group Commercial Medical earnings.
Further, due to this seasonality dynamic, the non-GAAP treatment of Employer Group Commercial Medical results is also anticipated to increase the first-quarter 2023 Insurance segment benefit ratio by approximately 30 basis points, with no impact expected on the full-year 2023 Insurance segment benefit ratio.