Humana bullish on Medicare Benefit as income rise
Humana stays optimistic about Medicare Benefit regardless of main regulatory adjustments, CEO Bruce Broussard instructed traders throughout an earnings name Wednesday.
“I imagine the trade will proceed to see sturdy development. We’ve got seen the trade develop properly regardless of an unfavorable fee surroundings previously,” Broussard stated.
Web revenue rose 33.3% to $1.2 billion through the first quarter, pushed by Medicare Benefit development, the medical health insurance firm reported. Income elevated 12% to $26.7 billion however membership remained flat at 17.1 million because the insurer winds down its employer business. The corporate’s CenterWell supplier division continues to hunt major care and residential well being acquisition targets, Broussard stated.
Humana doesn’t anticipate the brand new Facilities for Medicare and Medicaid Providers insurance policies will impede Medicare Benefit development regardless of a decrease benchmark fee subsequent yr and stricter guidelines on audits and different areas. Humana’s Medicare Benefit membership will develop within the “excessive single digits” for the 2024 plan yr, Broussard stated.
Humana opposes CMS’ new Medicare Advantage audit coverage, Broussard stated. In the course of the J.P. Morgan Healthcare Convention in January, Diamond stated insurers would likely sue over the regulation. “It will likely be vital to work with CMS about how they intend to implement the audit program going ahead,” Broussard stated Wednesday.
Humana’s days claims payable declined by almost two days to 41.2 from the year-ago interval. Insurers purpose for greater days claims payable as a result of the measure displays how a lot they maintain in reserve to pay excellent obligations. Moreover, Humana’s days claims payable plummeted virtually 5 days from the fourth quarter. Insurers usually report greater days claims payable firstly of a yr as a result of affected person volumes are decrease and policyholders have not but met their annual deductibles.
Greater pharmacy spending, reinsurance funds, funds due suppliers in value-based care agreements and modifications to claims processing brought on the decline in days claims payable, Chief Monetary Officer Susan Diamond stated throughout a name with traders.
This pattern aligns with monetary outcomes from medical health insurance firms resembling UnitedHealth Group, Elevance Health and Centene, which beforehand introduced that days claims payable fell through the first three months of 2023. Humana policyholders are visiting physicians at a fee much like earlier than the COVID-19 pandemic started in 2020, however inpatient hospital utilization stays low, Diamond stated.
That contrasts with giant well being techniques resembling Dallas, Texas-based Tenet HealthcareKing of Prussia, Pennsylvania-based Common Well being Providers and Nashville, Tennessee-based HCA Healthcare asserting upticks in utilization. “Even with what the hospitals are reporting, we’re nonetheless seeing some web favorability within the quarter,” Diamond stated.
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