Humana Stuns With Great Numbers In Recovery
Humana stunned investors with great Q1 recovery numbers, well above what investors had expected. The company beat earnings expectations for the first quarter and reaffirmed its 2025 guidance. Medical costs for the Medicare Advantage (MA)-dominant insurer came in as predicted.
Humana had a profit of $1.2 billion, up 68% compared to the first quarter last year.
Humana has shed unprofitable MA lives in an effort to get back to a 3% margin by 2027.
As important, Humana is seeking to undo a huge concentration of its MA lives in one very large master contract. This will take several years. When Humana’s Star performance was industry-leading, the concentration helped. But that contract dropped dramatically in Star Year 2025, causing a huge loss of quality bonus and rate rebate revenue.
Humana still expects a medical loss ratio (MLR) for the full year of between 90.1% and 90.5%. This shows the battles all MA plans are facing this year, with a rate reduction and surging utilization.
Additional articles: https://www.fiercehealthcare.com/payers/humana-reaffirms-guidance-it-posts-12b-q1-profit-beat and https://www.healthcaredive.com/news/humana-posts-really-good-first-quarter-stable-medical-costs/746704/ and https://www.beckerspayer.com/payer/humana-posts-1-2b-profit-in-q1/
(Some articles may require a subscription.)
#medicareadvantage #humana #healthplans #rates #margins
https://www.modernhealthcare.com/finance/humana-medicare-advantage-management-earnings
PBMs Face State Reforms
A good Modern Healthcare article on the advent of state laws and regulations to reform pharmacy benefits managers’ (PBMs) practices. In Arkansas, a law has passed that would bar a healthcare entity from owning both a PBM and pharmacy. Several other states are considering similar laws, which could upend the financial strategies of big vertically integrated healthcare entities (UnitedHealth Group, The Cigna Group, and CVS Health).
Many states are looking at other reforms, including banning spread pricing. The state focus has occurred because of the failure of Congress to pass federal legislation, although that could change with a rising bipartisan consensus on the need for reform. Reforms almost passed at the end of 2024.
(Article may require a subscription.)
#pbms #drugpricing
https://www.modernhealthcare.com/politics-policy/arkansas-pbm-law-unitedhealth-cvs-health
House Republicans Want Medicare Pilot Reforms
House Republicans are calling on the Centers for Medicare and Medicaid Services (CMS) to reform its priorities on the plethora of Medicare pilots, including by improving transparency with providers and focusing on payment models that save the government money.
A number of studies have found that on balance the pilots have cost more than they have saved, with major administrative costs as well.
#medicare #valuebasedcare #vbc
KFF Bill Of The Month Shows The Need For Hospital Price Reform
A good “Bill of the Month” article from healthcare policy group KFF. In this case, an American consumer received a huge laboratory bill from a hospital-based provider. On one hand, the provider did a disservice by not indicating certain services were not preventive in nature. Further, the hospital billed thousands for lab tests when other providers would have charged hundreds.
#healthcare #coverage #pricetransparency #surprisebilling
Could Deregulation Increase Healthcare Costs?
An interesting Health Affairs Forefront blog that makes a convincing case that the Trump administration should not rollback recent Biden-era regulations from 2023 and 2024 that sought to modernize Medicaid processes, cut red tape, promote efficiency, and use technology. The author makes a case that a rollback would cost money and lead to coverage losses.
(Article may require a subscription.)
#medicaid #regulations
— Marc S. Ryan
