Regarding the company’s individual commercial medical coverage (Individual Commercial), substantially all of which is offered on-exchange through the federal Marketplaces, Humana has worked over the past several years to address market and programmatic challenges in order to keep coverage options available wherever it could offer a viable product. This has included pursuing business changes, such as modifying networks, restructuring product offerings, reducing the company’s geographic footprint and increasing premiums.
For 2017, UnitedHealthcare, along with most of its subsidiaries, is discontinuing its participation in the individual market in Colorado, both on and off the exchange. However, Golden Rule Insurance, a subsidiary of UnitedHealthcare, will continue to offer its individual plans in Colorado off of the exchange. UnitedHealthcare will also continue its small and large group business in the state.
Humana will continue in the small group market for 2017 off the exchange, while exiting the individual market for both Humana Health Plans and Humana Insurance Company.
This is really just a summary of my last 4 posts. I've combed through the SERFF databases for every state which uses the system for rate filings, and while very few have the actual 2017 rate filing requests listed yet, at least 4 of them have official individual market exit letters submitted for 2017 from Jane Rouse, the Product Compliance Process Owner for Humana Insurance Co:
This list may grow as additional state filing data and/or press releases come out from Humana, but assuming these are the only 4 states Humana is bailing on, the news isn't quite as bad as it appears at first.
To be clear, I'm not saying this is a good development; when you combine it with the recent UnitedHealthcare Dropout Odometer it's more of a drip-drip-drip sort of thing. But it isn't disasterous for the exchanges either (at least not yet).
UPDATE: I've been informed by a reliable source that Humana is also dropping out of the individual market in Nevada next year, although I don't have any actual enrollment data there. Humana is not currently participating on the Nevada exchange, however, so any dropped enrollments would be OFF-exchange only. In fact, I'm pretty sure that the only individual market enrollees Humana has in Nevada are grandfathered policies anyway, so the numbers should be pretty nominal there.
As previously disclosed, in the fourth quarter of 2015 the company recorded a PDR associated with its 2016 individual commercial ACA‐compliant offerings. Historically, this business has reported a profit in the first quarter of the year due to the related benefit designs. Because the company continues to anticipate a loss associated with this business for the full year 2016, the seasonal earnings generated in 1Q 2016 are offset by an increase in the PDR, resulting in a higher benefit ratio year over year. This first quarter seasonality was anticipated as the company developed its estimate of the full‐year PDR recorded in the fourth quarter of 2015.
Financial results associated with the wind‐down of the non‐ACA compliant (legacy) business, including the related release of policy reserves, as well as indirect administrative costs associated with ACA‐compliant offerings are included in the company’s 1Q 2016 financial results.