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Analysis

Humana Projects 17% Medicare Advantage Membership Growth for 2019

By Jack O'Brien  
   November 06, 2019

The Louisville–based health plan's adjusted income fell year-over-year but its adjusted EPS did rise.

Humana expects to grow its Medicare Advantage membership by 530,000 members, totaling a 17% increase for 2019, according to its latest earnings report released Wednesday morning.

At the end of Q3, Humana reported total revenues of $16.2 billion, just as it had in its Q2 earnings report. The company's earnings per share (EPS) also rose from $4.65 to $5.14. 

Additionally, the Louisville–based insurer's adjusted income fell $53 million year-over-year, though its adjusted EPS did rise by $0.45 during the same period of time.

Related: Humana Projects Additional 500K Medicare Advantage Members for 2019

The company also reported cash flows of $2.4 billion, a turnaround compared to the $1 billion negative cash flow reported this time last year.

Humana raised its year-end guidance, as the company projects its year-end EPS to be $18.32 with an adjusted EPS of $17.60.

C-SUITE PERSPECTIVE: 

"Our results to date through the third quarter of 2019 are a testament to our focus on operational excellence and to the maturity of our strategy," Bruce Broussard, CEO of Humana, said in a statement. "We are seeing a number of positive outcomes as a result of our discipline and focus in these areas including improvements in quality as reflected in our strong Star scores and CMS program audit results, and the experience of our members, with increased net promoter scores. Highlighting this success is our significant individual Medicare Advantage membership growth which is now projected to exceed half a million members for the full year. Important too, we continue to reap the benefits of a highly engaged and dedicated workforce that makes these results possible."

Following the release of the company's Q3 earnings report, Humana's stock was trading up by more than 2.5% during the early morning session.

Related: Humana CEO on Digital Health Technology, Drug Costs and More

Humana's earnings were released about a week after the company announced that it would lay off more than 800 employees in an effort to reduce its payroll by 2%.

The company also announced a seven-year partnership with Microsoft two weeks ago that will aim to deliver improved health outcomes and digital solutions for personalized care.

Related: Humana Will Lay Off More Than 800 Employees in Louisville and Several States

Related: Humana, Microsoft to Partner on Healthcare Solutions

ADDITIONAL HUMANA Q3 EARNINGS REPORT HIGHLIGHTS:

  • For yet another quarter, retail segment revenues topped $14 billion, up more than $2 billion compared to this time last year.
  • Debt-to-capitalization ratio rose to 34.3%, an increase of 1.5% year-over-year.
  • Healthcare services segment revenues reached $6.6 billion, though segment earnings slipped by $3 million.

For complete financial information, review Humana's filing with the Securities and Exchange Commission.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.


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