- Humana beat Wall Street expectations during the first quarter of 2020, delivering better than expected earnings, revenue and medical loss ratio. Analysts with Jefferies said it had the strongest first quarter results of any managed care organization reporting so far.
- Revenue increased about 18% to $19 billion bolstered by Humana's membership growth in its individual and group Medicare Advantage lines and state-based contracts. Adjusted pre-tax income increased almost 25% to $1 billion from $803 million during the first quarter of last year.
- As the novel coronavirus crisis continues to batter the economy and healthcare sector, Humana on Wednesday reaffirmed its adjusted earnings per share outlook and increased its expectations for Medicare Advantage enrollment. However, the company is withdrawing all other detailed aspects of its previous guidance due to the variability of the pandemic.
The financial effects of COVID-19 were not material to Humana's first quarter, the company disclosed in its first quarter earnings release. Still, the Louisville-based insurer said utilization was lower as patients and providers deferred care as a result of the pandemic and stay-at-home orders implemented in various locations across the country.
Yet, the decline in hospital admissions and utilization was offset by an increase in pharmacy costs as Humana allowed early refills to ensure members had adequate supplies amid the pandemic.
Lower utilization has continued into April as providers continue to delay elective care. However, it may soon come back online, Humana executives said, though they cautioned in the release a "number of significant variables make the timing and impact of this recovery uncertain."
As the pandemic unfolds, one of the key learnings for Humana was not necessarily directly related to medical services. CEO Bruce Broussard said "a significant number of beneficiaries have concerns about food insecurities, social isolation and access to needed prescription medicines."
The company has fulfilled orders for more than half a million meals and have connected members to emotional support services.
A large share of Humana's membership base is made up of Medicare beneficiaries. Humana expects Medicare Advantage growth for 2020 to be between 300,000 and 350,000.
Humana does offer coverage to the commercial market and is heavily weighted to small businesses, executives said Wednesday. Although its commercial medical membership was running in line with expectations, it now is bracing for this segment to be heavily challenged by COVID-19 as small group plan terminations are expected.