Profile: Humana Inc (HUM)
23 Apr 2014
Humana Inc. (Humana), incorporated on July 27, 1964, is a health care company. Humana operates in three segments: Retail, Employer Group, and Health and Well-Being Services. The Company offers a range of insurance products and health and wellness services that incorporate an integrated approach to lifelong well-being. As of December 31, 2011, it had approximately 11.2 million members in its medical benefit plans, as well as approximately 7.3 million members in its specialty products. During the year ended December, 31, 2011, 76% of its premiums and services revenue were derived from contracts with the federal government, including 16% related to its Medicare Advantage contracts in Florida with the Centers for Medicare and Medicaid Services (CMS), and 10% related to its military services contracts. Under its Medicare Advantage CMS contracts in Florida, it provides health insurance coverage to approximately 381,300 members. December 30, 2011, it acquired Medicare Advantage HMO MD Care, Inc. (MD Care). On December 6, 2011, it acquired Anvita, Inc. (Anvita). In December 2011, the Company acquired Anvita HealthTM. In July 2012, the Company acquired SeniorBridge, a national chronic-care provider known for providing in-home care management and caregiving services for seniors. In August 2012, the Company acquired Harris, Rothenberg International, Inc., a provider of work/life services and employee assistance programs. In November 2012, the Company acquired Certify Data Systems. In December 2012, the Company acquired Metropolitan Health Networks, Inc.
The Retail segment consists of Medicare and commercial insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and financial protection products, marketed directly to individuals. The Employer Group segment consists of Medicare and commercial fully-insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and financial protection products, as well as administrative services only products marketed to employer groups. The Health and Well-Being Services segment includes services offered to our health plan members, as well as to third parties that promote health and wellness, including primary care, pharmacy, integrated wellness, and home care services. The Other Businesses category consists of its Military services, primarily its TRICARE South Region contract, Medicaid, and closed-block long-term care businesses, as well as its contract with CMS to administer the Limited Income Newly Eligible Transition program, or the LI-NET program. In 2011, it launched HumanaVitality, a joint venture with Discovery Holdings Ltd., providing its members with access to a science-based, actuarially driven wellness and loyalty program that features a range of well-being tools and rewards that are customized to an individual’s needs and wants.
Retail Segment Products
The segment is consisted of products sold on a retail basis to individuals, including medical and supplemental benefit plans. The Company has a geographically diverse membership base that provides us with a network of PPO and HMO providers. The Company contracts with CMS under the Medicare Advantage program to provide a comprehensive array of health insurance benefits, including wellness programs, to Medicare eligible persons under Health maintenance organizations (HMO), Preferred provider organizations (PPO), and Private Fee-For-Service (PFFS), plans in exchange for contractual payments received from CMS, usually a fixed payment per member per month.
The Company’s Medicare HMO and PPO plans, which cover Medicare-eligible individuals residing in certain counties, may eliminate or reduce coinsurance or the level of deductibles on many other medical services while seeking care from participating in-network providers or in emergency situations. Except in emergency situations, HMO plans provide no out-of-network benefits. Its Medicare PFFS plans generally have no preferred network. Individuals in these plans pay the Company a monthly premium to receive typical Medicare Advantage benefits along with health care provider that accepts individuals at rates equivalent to original Medicare payment rates. At December 31, 2011, it provided health insurance coverage under CMS contracts to approximately 1,640,300 individual Medicare Advantage members. Under its individual Medicare Advantage contracts with CMS in Florida, it provided health insurance coverage to approximately 362,100 members. The Company offers prescription drug plans (PDPs), under Medicare Part D. As of December 31, 2011, it served approximately 242,000 dual eligible members in its Medicare Advantage plans and approximately 482,000 dual eligible members in its prescription drug plans.
The Company’s individual health plans, marketed under the HumanaOne brand include offerings designed to promote wellness and engage consumers. HumanaOne plans are designed specifically for self-employed entrepreneurs, small-business employees, part-time workers, students, and early retirees and include a spectrum of medical benefits with multiple in-network coinsurance levels and annual deductible choices, as well as HumanaVitality, its wellness and loyalty rewards program. Its HumanaOne plans primarily are offered as PPO plans in select markets where it can generally underwrite risk and utilize its existing networks and distribution channels.
Employer Group Segment Products
The segment is comprised of products sold to employer groups, including medical and supplemental benefit plans. Its commercial products sold to employer groups include a spectrum of medical benefits with multiple in-network coinsurance levels and annual deductible choices that employers of all sizes can offer to their employees on either a fully-insured, through HMO, PPO, or POS plans, or self-funded basis. Its plans integrate clinical programs, plan designs, communication tools, and spending accounts. Its individual commercial products, the employer group offerings include HumanaVitality’s wellness offerings.
The Company’s administrative services only (ASO), products are offered to employers who self-insure their employee health plans. As with individual commercial policies, employers can customize their offerings with optional benefits, such as dental, vision, life, and a portfolio of financial protection products. It offers products that enable employers that provide post-retirement health care benefits to replace Medicare wrap or Medicare supplement products with Medicare Advantage prescription drug plans (PDPs) from Humana. These products offer the same types of benefits and services available to members in its individual Medicare plans.
Health and Well-Being Services Segment Products
Th segment is comprised of businesses that promote health and well-being. These services are sold primarily to other Humana businesses, as well as external health plan members and other employers or individuals. Humana Pharmacy Solutions (HPS), manages traditional prescription drug coverage for both individuals and employer groups in addition to providing an array of pharmacy solutions. HPS also operates prescription mail order services for brand and generic drugs, specialty drugs and diabetic supplies through RightSourceRx, as well as research services.
The Company’s subsidiary, Concentra Inc., delivers occupational medicine, urgent care, physical therapy, and wellness services to employees and the general public through its operation of medical centers and worksite medical facilities. In addition to Concentra, its primary care services also include its CAC Medical Centers (CAC), in South Florida. CAC operates full-service, multi-specialty medical centers staffed by primary care physicians and medical specialists practicing cardiology, endocrinology, geriatric medicine, internal medicine, ophthalmology, neurology, and podiatry. Corphealth, Inc. (doing business as LifeSynch), a Humana subsidiary, offers disease management services through a suite of integrated products, integrating behavioral health services with wellness programs, and employee assistance programs and work-life services. LifeSynch’s integrated wellness services include Hummingbird Coaching, a wellness coaching company that offers a turn-key coaching program, an enhancement to a medically based coaching protocol and a platform that makes coaching programs.
HumanaVitality, LLC, a joint venture with Discovery Holdings Ltd., provides its members with access to a science-based, actuarially driven wellness and loyalty program that features a range of well-being tools and rewards that are customized to an individual’s needs and wants. HumanaVitality became available to certain of its members in mid-2011. Humana Cares provides care coordination services for individuals living with multiple chronic conditions, individuals with disabilities, fragile and aging-in-place members and their care givers.
The Company’s TRICARE South Region contracts with the United States Department of Defense (DoD), it provides health insurance coverage to the dependents of active duty military personnel and to retired military personnel and their dependents. In addition to a traditional indemnity option, participants may enroll in a HMO-like plan with a point-of-service option or take advantage of reduced copayments by using a network of preferred providers, similar to a PPO. Its TRICARE South Region contract covers approximately three million beneficiaries as of December 31, 2011, in Florida, Georgia, South Carolina, Mississippi, Alabama, Tennessee, Louisiana, Arkansas, Texas, and Oklahoma. The South Region is one of the three regions in the United States as defined by the Department of Defense. Of these eligible beneficiaries, 1.3 million were TRICARE ASO members representing active duty beneficiaries and seniors over the age of 65 for which the Department of Defense retains all of the risk of financing the cost of their health benefit. The Company has subcontracted with third parties to provide selected administration and specialty services under the contract.
Medicaid is a federal program that is state-operated to facilitate the delivery of health care services primarily to low-income residents. Each electing state develops, through a state-specific regulatory agency, a Medicaid managed care initiative that must be approved by CMS. Its Medicaid business consists of contracts in Puerto Rico and Florida, with the majority in Puerto Rico. LI-NET program allows individuals who receive Medicare’s low-income subsidy to also receive immediate prescription drug coverage at the point of sale if they are not already enrolled in a Medicare Part D plan. CMS temporarily enrolls newly identified individuals with both Medicare and Medicaid into the LI-NET program, and subsequently transitions each member into a Medicare Part D plan that may or may not be a Humana Medicare plan. It acquired a closed block of approximately 35,000 long-term care policies in connection with its acquisition of KMG America Corporation.
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