- Reports 2Q22 earnings per diluted common share of $5.48 on a
GAAP basis, Adjusted EPS of $8.67; reports YTD 2022 EPS of $12.77
on a GAAP basis, $16.70 on an Adjusted basis
- Updates FY 2022 EPS guidance to 'approximately $20.30' on a
GAAP basis; raises to 'approximately $24.75' on an Adjusted basis,
representing growth of 20 percent over FY 2021 Adjusted EPS
- Reaffirms FY 2022 expected individual Medicare Advantage
membership growth range of approximately 150,000 to 200,000
Humana Inc. (NYSE: HUM) today reported consolidated pretax
results and diluted earnings per common share for the quarter ended
June 30, 2022 (2Q22) versus the quarter ended June 30, 2021 (2Q21)
and for the six months ended June 30, 2022 (YTD 2022) versus the
six months ended June 30, 2021 (YTD 2021) as noted in the tables
below.
Consolidated income before income taxes
and equity in net earnings (pretax results) In millions
2Q22 (a)
2Q21 (b)
YTD 2022 (c)
YTD 2021 (d)
Generally Accepted Accounting
Principles (GAAP)
$1,122
$738
$2,342
$1,778
Amortization associated with identifiable
intangibles
18
15
36
30
Put/call valuation adjustments associated
with company's non-consolidating minority interest investments
(8
)
419
(29
)
534
Transaction and integration costs
36
22
53
22
Change in fair market value of
publicly-traded equity securities
62
(63
)
170
22
Charges associated with productivity
initiatives related to the previously disclosed $1 billion value
creation plan
203
—
203
—
Adjusted (non-GAAP)
$1,433
$1,131
$2,775
$2,386
Diluted earnings per common share
(EPS)
2Q22 (a)
2Q21 (b)
YTD 2022 (c)
YTD 2021 (d)
GAAP
$5.48
$4.55
$12.77
$10.94
Amortization associated with identifiable
intangibles
0.11
0.09
0.22
0.18
Put/call valuation adjustments associated
with company's non-consolidating minority interest investments
(0.05
)
2.49
(0.18
)
3.18
Transaction and integration costs
0.22
0.13
0.32
0.13
Change in fair market value of
publicly-traded equity securities
0.37
(0.37
)
1.03
0.13
Charges associated with productivity
initiatives related to the previously disclosed $1 billion value
creation plan
1.23
—
1.23
—
Tax provision related to the pending sale
of Kindred at Home's Hospice and Personal Care divisions
1.31
—
1.31
—
Adjusted (non-GAAP)
$8.67
$6.89
$16.70
$14.56
“We are pleased with our significant progress in growing the
business, including our primary care clinics and our organic
expansion of Medicaid membership, combined with the initial rollout
of our value-based home care,” said Bruce D. Broussard, Humana’s
President and Chief Executive Officer. “In addition, our strong
2022 EPS growth of 20 percent, and the investments our one
billion-dollar value initiative allowed us to make in our 2023
Medicare Advantage product offerings demonstrate our commitment to
balancing our long-term membership and earnings growth
targets.”
Please refer to the tables above, as well as the consolidated
and segment highlight sections in the detailed earnings release for
additional discussion of the factors impacting the
year-over-comparisons.
In addition, below is a summary of key consolidated and segment
statistics comparing 2Q22 to 2Q21 and YTD 2022 to YTD 2021.
Humana Inc. Summary of Results
(dollars in millions, except per share amounts)
2Q22 (a)
2Q21 (b)
YTD 2022 (c)
YTD 2021 (d)
CONSOLIDATED
Revenues - GAAP
$23,662
$20,645
$47,632
$41,313
Revenues - Adjusted
$23,724
$20,582
$47,802
$41,335
Pretax income - GAAP
$1,122
$738
$2,342
$1,778
Pretax income - Adjusted
$1,433
$1,131
$2,775
$2,386
Diluted EPS - GAAP
$5.48
$4.55
$12.77
$10.94
Diluted EPS - Adjusted
$8.67
$6.89
$16.70
$14.56
Benefits expense ratio - GAAP
85.8
%
85.8
%
86.1
%
85.9
%
Operating cost ratio - GAAP
13.4
%
10.3
%
12.7
%
10.0
%
Operating cost ratio - Adjusted
12.5
%
10.3
%
12.2
%
10.0
%
Operating cash flows - GAAP
$959
$360
$1,261
($477
)
Parent company cash and short term
investments
$800
$1,269
Debt-to-total capitalization
45.3
%
32.6
%
RETAIL
SEGMENT
Revenues - GAAP
$20,946
$18,545
$42,297
$37,193
Benefits expense ratio - GAAP
87.0
%
87.0
%
87.5
%
87.3
%
Operating cost ratio - GAAP
8.2
%
8.3
%
8.1
%
8.0
%
Segment earnings - GAAP
$929
$836
$1,713
$1,630
Segment earnings - Adjusted
$932
$840
$1,721
$1,638
GROUP AND
SPECIALTY SEGMENT
Revenues - GAAP
$1,584
$1,718
$3,197
$3,455
Benefits expense ratio - GAAP
76.3
%
82.6
%
75.5
%
78.6
%
Operating cost ratio - GAAP
26.3
%
23.9
%
26.0
%
23.4
%
Segment earnings - GAAP
$101
$40
$233
$214
Segment earnings - Adjusted
$102
$41
$235
$216
HEALTHCARE
SERVICES SEGMENT
Revenues - GAAP
$8,962
$7,524
$17,650
$14,722
Operating cost ratio - GAAP
94.5
%
95.8
%
94.4
%
95.9
%
Segment earnings attributable to Humana-
GAAP
$436
$311
$882
$580
Adjusted earnings before interest, taxes,
depreciation and amortization (Adjusted EBITDA) (e)
$486
$388
$985
$717
2022 Earnings Guidance
2Q22 Adjusted EPS of $8.67 represents 26 percent growth over
2Q21 and is approximately $1.00 higher than the company’s previous
expectations. The outperformance was driven primarily by:
- better-than-anticipated medical cost trends in the company’s
individual Medicare Advantage and Medicaid businesses, partially
offset by higher than expected non-inpatient utilization in group
Medicare Advantage; and
- lower-than-anticipated administrative costs, some of which was
timing in nature.
Importantly, utilization in the company's core individual
Medicare Advantage business is running favorable to expectations.
The lower utilization trends and lack of COVID-19 headwind seen to
date allow the company to raise its FY 2022 Adjusted EPS guide by
$0.25 to ‘approximately $24.75’, while still maintaining a $0.50
EPS COVID-19 headwind for the back half of the year.
In addition, the revised guide contemplates the company making
approximately $0.75 EPS of additional marketing and distribution
investments in the back half of the year to further support its
improved 2023 Medicare Advantage value proposition. Finally, the
revised guide anticipates covering $0.65 EPS dilution related to
the pending divestiture of the company's 60 percent ownership of
Kindred at Home's Hospice and Personal Care divisions, which is
expected to close in the third quarter.
The company’s updated full year guidance reflects a compelling
20 percent growth in adjusted earnings for FY 2022 while funding
additional investments to support its long-term growth. If
additional favorability emerges in the back half of the year,
including the remaining $0.50 in embedded COVID-19 headwind, the
company will be prudent in balancing investments key to long-term
growth and additional shareholder returns in 2022. The company is
focused on maximizing long-term value and will be transparent in
its approach.
Diluted earnings per common
share
FY 2022
Guidance (f)
FY 2021 (g)
GAAP
approximately $20.30
$22.67
Amortization of identifiable
intangibles
0.43
0.39
Gain on Kindred at Home equity method
investment
—
(8.73
)
Put/call valuation adjustments associated
with company's non-consolidating minority interest investments
(0.18
)
3.56
Transaction and integration costs
0.63
0.72
Change in fair market value of
publicly-traded equity securities
1.03
2.03
Charges associated with productivity
initiatives related to the previously disclosed $1 billion value
creation plan
1.23
—
Tax provision related to the pending sale
of Kindred at Home's Hospice and Personal Care divisions
1.31
—
Adjusted (non-GAAP) – FY 2022
projected; FY 2021 reported
approximately $24.75
$20.64
Management Transitions
After a long and successful career at Humana, Alan Wheatley,
Retail Segment President, will be transitioning from his role at
the end of the year. Humana proactively develops succession plans
for key business leaders, and we are fortunate to have a number of
seasoned leaders within the Retail organization who will take on
expanded responsibilities, while we also initiate an external
search for a new senior executive leader with a broader role. Alan
will serve as a strategic advisor into next year to ensure a
seamless transition. We will share more detail about these changes
on our second quarter earnings call.
“Alan’s imprints on the company over the last 31 years are
significant,” said Broussard. “He pioneered Humana as a leader in
Medicare Advantage when the program was in its infancy and it’s a
legacy that thrives and endures today.”
“The company has experienced rapid growth and transformation,
and I’m incredibly proud to have been part of it,” said Wheatley.
“It’s been an honor to work with the team to build a strong
company, and one that’s guided by a purpose in helping millions of
people achieve their best health. The company’s unique strategic
position and strong execution capabilities, make for an exciting
future beginning with our upcoming annual enrollment period.”
Detailed Press Release
Humana’s full earnings press release including the statistical
pages has been posted to the company’s Investor Relations site and
may be accessed at https://humana.gcs-web.com/ or via a current
report on Form 8-K filed by the company with the Securities and
Exchange Commission this morning (available at www.sec.gov or on
the company’s website).
Conference Call
Humana will host a conference call at 9:00 a.m. Eastern time
today to discuss its financial results for the quarter and the
company’s expectations for future earnings.
To participate via phone, please register in advance at this
link -
https://register.vevent.com/register/BI9b70f6bf789c4b3fac9c5b4341adec6a.
Upon registration, telephone participants will receive a
confirmation email detailing how to join the conference call,
including the dial-in number and a unique registrant ID that can be
used to access the call. A webcast of the 2Q22 earnings call may
also be accessed via Humana’s Investor Relations page at
humana.com. The company suggests participants for both the
conference call and those listening via the web dial in or sign on
at least 15 minutes in advance of the call.
For those unable to participate in the live event, the archive
will be available in the Historical Webcasts and Presentations
section of the Investor Relations page at humana.com, approximately
two hours following the live webcast.
Footnotes
The company has included financial measures throughout this
earnings release that are not in accordance with GAAP. Management
believes that these measures, when presented in conjunction with
the comparable GAAP measures, are useful to both management and its
investors in analyzing the company’s ongoing business and operating
performance. Consequently, management uses these non-GAAP
(Adjusted) financial measures as indicators of the company’s
business performance, as well as for operational planning and
decision making purposes. Non-GAAP (Adjusted) financial measures
should be considered in addition to, but not as a substitute for,
or superior to, financial measures prepared in accordance with
GAAP. All financial measures in this press release are in
accordance with GAAP unless otherwise indicated. Please refer to
the footnotes for a detailed description of each item adjusted out
of GAAP financial measures to arrive at a non-GAAP (Adjusted)
financial measure.
(a) 2Q22 Adjusted results exclude the
following:
- Amortization expense for identifiable intangibles of
approximately $18 million pretax, or $0.11 per diluted common
share. GAAP measures affected in this release include consolidated
pretax, EPS, and segment earnings (including amortization expense
of $3 million in the Retail segment and $1 million in the Group and
Specialty segment).
- Put/call valuation adjustments of approximately $8 million
pretax, or $0.05 per diluted common share, associated with Humana’s
non-consolidating minority interest investments. GAAP measures
affected in this release include consolidated pretax and EPS.
- Transaction and integration costs of approximately $36 million
pretax, or $0.22 per diluted common share; GAAP measure affected in
this release include consolidated pretax, EPS, and the consolidated
operating cost ratio.
- Change in fair market value of publicly-traded equity
securities of $62 million pretax, or $0.37 per diluted common
share. GAAP measures affected in this release include consolidated
pretax, EPS, and consolidated revenues.
- Charges of $203 million pretax, or $1.23 per diluted common
share, primarily related to asset and software impairment and
abandonment, as a result of initiatives undertaken associated with
the company's previously disclosed $1 billion value creation plan
to create capacity to fund growth and investment in its Medicare
Advantage business and further expansion of its Healthcare Services
capabilities in 2023. GAAP measures affected in this release
include consolidated pretax, EPS, and the consolidated operating
cost ratio.
- Impact of $1.31 per diluted common share related to the
recognition of a deferred tax liability in connection with the
held-for-sale classification of Kindred at Home's Hospice and
Personal Care divisions resulting from the company's pending sale
of the business. EPS is the only GAAP measure affected in this
release.
Consolidated revenues
(in millions)
2Q22 (a)
2Q21 (b)
YTD 2022 (c)
YTD 2021 (d)
GAAP
$23,662
$20,645
$47,632
$41,313
Change in fair market value of
publicly-traded equity securities
62
(63
)
170
22
Adjusted (non-GAAP)
$23,724
$20,582
$47,802
$41,335
Operating cost ratio
2Q22 (a)
2Q21 (b)
YTD 2022 (c)
YTD 2021 (d)
GAAP
13.4
%
10.3
%
12.7
%
10.0
%
Transaction and integration costs
(0.1
)%
—
%
(0.1
)%
—
%
Charges associated with productivity
initiatives related to the previously disclosed $1 billion value
creation plan
(0.8
)%
—
%
(0.4
)%
—
%
Adjusted (non-GAAP)
12.5
%
10.3
%
12.2
%
10.0
%
(b) 2Q21 Adjusted results exclude the
following:
- Amortization expense for identifiable intangibles of
approximately $15 million pretax, or $0.09 per diluted common
share. GAAP measures affected in this release include consolidated
pretax, EPS, and segment earnings (including amortization expense
of $4 million in the Retail segment and $1 million in the Group and
Specialty segment).
- Put/call valuation adjustments of approximately $419 million
pretax, or $2.49 per diluted common share, associated with Humana’s
non-consolidating minority interest investments, including the
impact of the termination of the put/call agreement related to
Kindred at Home as a result of the transaction announced on April
27, 2021. GAAP measures affected in this release include
consolidated pretax and EPS.
- Transaction and integration costs of approximately $22 million,
or $0.13 per diluted common share; GAAP measures affected in this
release include consolidated pretax, EPS, and the consolidated
operating cost ratio. See Operating cost ratio reconciliation above
for respective period.
- Change in fair market value of publicly-traded equity
securities of $63 million pretax, or $0.37 per diluted common
share. GAAP measures affected in this release include consolidated
pretax, EPS, and consolidated revenues. See Revenues reconciliation
above for respective period.
(c) YTD 2022 Adjusted results exclude the
following:
- Amortization expense for identifiable intangibles of
approximately $36 million pretax, or $0.22 per diluted common
share. GAAP measures affected in this release include consolidated
pretax, EPS, and segment earnings (including amortization expense
of $8 million in the Retail segment and $2 million in the Group and
Specialty segment).
- Put/call valuation adjustments of approximately $29 million
pretax, or $0.18 per diluted common share, associated with Humana’s
non-consolidating minority interest investments. GAAP measures
affected in this release include consolidated pretax and EPS.
- Transaction and integration costs of approximately $53 million
pretax, or $0.32 per diluted common share; GAAP measure affected in
this release include consolidated pretax, EPS, and the consolidated
operating cost ratio. See Operating cost ratio reconciliation above
for respective period.
- Change in fair market value of publicly-traded equity
securities of $170 million pretax, or $1.03 per diluted common
share. GAAP measures affected in this release include consolidated
pretax, EPS, and consolidated revenues. See Revenues reconciliation
above for respective period.
- Charges of $203 million pretax, or $1.23 per diluted common
share, primarily related to asset and software impairment and
abandonment, as a result of initiatives undertaken associated with
the company's previously disclosed $1 billion value creation plan
to create capacity to fund growth and investment in its Medicare
Advantage business and further expansion of its Healthcare Services
capabilities in 2023. GAAP measures affected in this release
include consolidated pretax, EPS, and the consolidated operating
cost ratio.
- Impact of $1.31 per diluted common share related to the
recognition of a deferred tax liability in connection with the
held-for-sale classification of Kindred at Home's Hospice and
Personal Care divisions resulting from the company's pending sale
of the business. EPS is the only GAAP measure affected in this
release.
d) YTD 2021 Adjusted results exclude the
following:
- Amortization expense for identifiable intangibles of
approximately $30 million pretax, or $0.18 per diluted common
share; GAAP measures affected in this release include consolidated
pretax, EPS, and segment earnings (including amortization expense
of $8 million in the Retail segment and $2 million in the Group and
Specialty segment).
- Put/call valuation adjustments of approximately $534 million,
or $3.18 per diluted common share, associated with Humana’s
non-consolidating minority interest investments, including the
impact of the termination of the put/call agreement related to
Kindred at Home as a result of the transaction announced on April
27, 2021. GAAP measures affected in this release include
consolidated pretax and EPS.
- Transaction and integration costs of approximately $22 million,
or $0.13 per diluted common share; GAAP measure affected in this
release include consolidated pretax, EPS, and the consolidated
operating cost ratio. See Operating cost ratio reconciliation above
for respective period.
- Change in fair market value of publicly-traded equity
securities of $22 million, or $0.13 per diluted common share. GAAP
measures affected in this release include consolidated pretax, EPS,
and consolidated revenues. See Revenues reconciliation above for
respective period.
(e) The Healthcare Services segment Adjusted earnings before
interest, taxes, depreciation and amortization (Adjusted EBITDA)
includes GAAP segment earnings attributable to Humana with
adjustments to add back depreciation and amortization expense,
interest expense, and income taxes. Adjusted EBITDA includes
results from all lines of business within the segment. Adjusted
EBITDA also includes the impact of Humana’s minority interest
related to the strategic partnership with Welsh, Carson, Anderson
& Stowe (WCAS) to develop and operate senior-focused,
payor-agnostic, primary care centers. Prior periods reflect the
impact of Humana's previous 40 percent minority interest in Kindred
at Home. In August 2021, Humana completed the acquisition of the
remaining 60 percent ownership of Kindred at Home and accordingly,
now consolidates its results.
Healthcare Services segment results
(in millions)
2Q22
2Q21
YTD 2022
YTD 2021
Segment earnings attributable to Humana-
GAAP
$436
$311
$882
$580
Depreciation and amortization expense
50
46
103
91
Interest and taxes
—
31
—
46
Adjusted EBITDA
$486
$388
$985
$717
(f) FY 2022 projected Adjusted results
exclude the following:
- Amortization expense for identifiable intangibles of
approximately $0.43 per diluted common share.
- Put/call valuation adjustments of approximately $0.18 per
diluted common share, associated with Humana’s non-consolidating
minority interest investments. FY 2022 GAAP EPS guidance excludes
the impact of future value changes of these put/call options as the
future value changes cannot be estimated.
- Transaction and integration costs of approximately $0.63 per
diluted common share.
- Change in fair market value of publicly-traded equity
securities of $1.03 per diluted common share. The future value of
publicly-traded equity securities, their impact on GAAP EPS, and
the related non-GAAP adjustment will fluctuate on the public
trading value of the stock. The guidance set forth herein assumes
no further change in the fair value of these investments.
- Estimated charges of $1.23 per diluted common share, primarily
associated with initiatives undertaken related to the company's
previously disclosed $1 billion value creation plan to create
capacity to fund growth and investment in its Medicare Advantage
business and further expansion of its Healthcare Services
capabilities in 2023. FY 2022 GAAP EPS guidance excludes the future
impact of potential charges related to the value creation
plan.
- Impact of $1.31 per diluted common share related to the
recognition of a deferred tax liability in connection with the
held-for-sale classification of Kindred at Home's Hospice and
Personal Care divisions resulting from the company's pending sale
of the business.
(g) FY 2021 Adjusted results exclude the
following:
- Amortization expense for identifiable intangibles of
approximately $0.39 per diluted common share.
- Gain associated with Kindred at Home equity method investment
of approximately $8.73 per diluted common share; the gain was
recorded upon closing of the Kindred at Home transaction in August
2021.
- Put/call valuation adjustments of approximately $3.56 per
diluted common share, associated with Humana’s non-consolidating
minority interest investments, including the impact of the
termination of the put/call agreement related to Kindred at Home as
a result of the transaction announced on April 27, 2021.
- Transaction and integration costs of approximately $0.72 per
diluted common share.
- Change in fair market value of publicly-traded equity
securities of $2.03 per diluted common share.
Cautionary Statement
This news release includes forward-looking statements regarding
Humana within the meaning of the Private Securities Litigation
Reform Act of 1995. When used in investor presentations, press
releases, Securities and Exchange Commission (SEC) filings, and in
oral statements made by or with the approval of one of Humana’s
executive officers, the words or phrases like “expects,”
“believes,” “anticipates,” “intends,” “likely will result,”
“estimates,” “projects” or variations of such words and similar
expressions are intended to identify such forward-looking
statements.
These forward-looking statements are not guarantees of future
performance and are subject to risks, uncertainties, and
assumptions, including, among other things, information set forth
in the “Risk Factors” section of the company’s SEC filings, a
summary of which includes but is not limited to the following:
- If Humana does not design and price its products properly and
competitively, if the premiums Humana receives are insufficient to
cover the cost of healthcare services delivered to its members, if
the company is unable to implement clinical initiatives to provide
a better healthcare experience for its members, lower costs and
appropriately document the risk profile of its members, or if its
estimates of benefits expense are inadequate, Humana’s
profitability could be materially adversely affected. Humana
estimates the costs of its benefit expense payments, and designs
and prices its products accordingly, using actuarial methods and
assumptions based upon, among other relevant factors, claim payment
patterns, medical cost inflation, and historical developments such
as claim inventory levels and claim receipt patterns. The company
continually reviews estimates of future payments relating to
benefit expenses for services incurred in the current and prior
periods and makes necessary adjustments to its reserves, including
premium deficiency reserves, where appropriate. These estimates
involve extensive judgment, and have considerable inherent
variability because they are extremely sensitive to changes in
claim payment patterns and medical cost trends. Accordingly,
Humana's reserves may be insufficient.
- If Humana fails to effectively implement its operational and
strategic initiatives, particularly its Medicare initiatives and
state-based contract strategy, the company’s business may be
materially adversely affected, which is of particular importance
given the concentration of the company’s revenues in these
products. In addition, there can be no assurances that the company
will be successful in maintaining or improving its Star ratings in
future years.
- If Humana fails to properly maintain the integrity of its data,
to strategically maintain existing or implement new information
systems, to protect Humana’s proprietary rights to its systems, or
to defend against cyber-security attacks or prevent other privacy
or data security incidents that result in security breaches that
disrupt the company's operations or in the unintentional
dissemination of sensitive personal information or proprietary or
confidential information, the company’s business may be materially
adversely affected.
- Humana is involved in various legal actions, or disputes that
could lead to legal actions (such as, among other things, provider
contract disputes and qui tam litigation brought by individuals on
behalf of the government), governmental and internal
investigations, and routine internal review of business processes
any of which, if resolved unfavorably to the company, could result
in substantial monetary damages or changes in its business
practices. Increased litigation and negative publicity could also
increase the company’s cost of doing business.
- As a government contractor, Humana is exposed to risks that may
materially adversely affect its business or its willingness or
ability to participate in government healthcare programs including,
among other things, loss of material government contracts;
governmental audits and investigations; potential inadequacy of
government determined payment rates; potential restrictions on
profitability; including by comparison of profitability of the
company’s Medicare Advantage business to non-Medicare Advantage
business; or other changes in the governmental programs in which
Humana participates. Changes to the risk-adjustment model utilized
by CMS to adjust premiums paid to Medicare Advantage, or MA, plans
according to the health status of covered members, including
proposed changes to the methodology used by CMS for risk adjustment
data validation audits that fail to address adequately the
statutory requirement of actuarial equivalence, if implemented,
could have a material adverse effect on the company's operating
results, financial position and cash flows.
- Humana's business activities are subject to substantial
government regulation. New laws or regulations, or legislative,
judicial, or regulatory changes in existing laws or regulations or
their manner of application could increase the company's cost of
doing business and have a material adverse effect on Humana’s
results of operations (including restricting revenue, enrollment
and premium growth in certain products and market segments,
restricting the company’s ability to expand into new markets,
increasing the company’s medical and operating costs by, among
other things, requiring a minimum benefit ratio on insured
products, lowering the company’s Medicare payment rates and
increasing the company’s expenses associated with a non-deductible
health insurance industry fee and other assessments); the company’s
financial position (including the company’s ability to maintain the
value of its goodwill); and the company’s cash flows.
- Humana’s failure to manage acquisitions, divestitures and other
significant transactions successfully may have a material adverse
effect on the company’s results of operations, financial position,
and cash flows.
- If Humana fails to develop and maintain satisfactory
relationships with the providers of care to its members, the
company’s business may be adversely affected.
- Humana faces significant competition in attracting and
retaining talented employees. Further, managing succession for, and
retention of, key executives is critical to the Company’s success,
and its failure to do so could adversely affect the Company’s
businesses, operating results and/or future performance.
- Humana’s pharmacy business is highly competitive and subjects
it to regulations and supply chain risks in addition to those the
company faces with its core health benefits businesses.
- Changes in the prescription drug industry pricing benchmarks
may adversely affect Humana’s financial performance.
- Humana’s ability to obtain funds from certain of its licensed
subsidiaries is restricted by state insurance regulations.
- Downgrades in Humana’s debt ratings, should they occur, may
adversely affect its business, results of operations, and financial
condition.
- The securities and credit markets may experience volatility and
disruption, which may adversely affect Humana’s business.
- The spread of, and response to, the novel coronavirus, or
COVID-19, underscores certain risks Humana faces, including those
discussed above, and the ongoing, heightened uncertainty created by
the pandemic precludes any prediction as to the ultimate adverse
impact to Humana of COVID-19. As the COVID-19 pandemic continues,
the premiums the company charges may prove to be insufficient to
cover the cost of health care services delivered to its members,
each of which could be impacted by many factors, including the
impacts that Humana has experienced, and may continue to
experience, to its revenues due to limitations on its ability to
implement clinical initiatives to manage health care costs and
chronic conditions of its members, and appropriately document their
risk profiles, as a result of the company’s members being unable or
unwilling to see their providers due to actions taken to mitigate
the spread of COVID-19; increased costs that may result from higher
utilization rates of medical facilities and services and other
increases in associated hospital and pharmaceutical costs; and
shifts in the company’s premium and medical claims cost trends to
reflect the demographic impact of higher mortality during the
COVID-19 pandemic. In addition, Humana is offering, and has been
mandated by legislative and regulatory action (including the
Families First Act and CARES Act) to provide, certain expanded
benefit coverage to its members, such as waiving, or reimbursing,
certain costs for COVID-19 testing, vaccinations and treatment.
These measures taken by Humana, or governmental action, to respond
to the ongoing impact of COVID-19 (including further expansion or
modification of the services delivered to its members, the adoption
or modification of regulatory requirements associated with those
services and the costs and challenges associated with ensuring
timely compliance with such requirements), and the potential for
widespread testing, treatments and the distribution and
administration of COVID-19 vaccines, could adversely impact the
company’s profitability. The spread and impact of COVID-19 and
additional variants, or actions taken to mitigate this spread,
could have material and adverse effects on Humana’s ability to
operate effectively, including as a result of the complete or
partial closure of facilities or labor shortages. Disruptions in
public and private infrastructure, including communications,
availability of in-person sales and marketing channels, financial
services and supply chains, could materially and adversely disrupt
the company’s normal business operations. A significant subset of
the company's and the company's third party providers' employee
population are in a remote work environment in an effort to
mitigate the spread of COVID-19, which may exacerbate certain risks
to Humana’s business, including an increased demand for information
technology resources, increased risk of phishing and other
cybersecurity attacks, and increased risk of unauthorized
dissemination of sensitive personal, proprietary, or confidential
information. The continued COVID-19 pandemic has severely impacted
global economic activity, including the businesses of some of
Humana’s commercial customers, and caused significant volatility
and negative pressure in the financial markets. In addition to
disrupting Humana’s operations, these developments may adversely
affect the timing of commercial customer premium collections and
corresponding claim payments, the value of the company’s investment
portfolio, or future liquidity needs. The ongoing, heightened
uncertainty created by the pandemic precludes any prediction as to
the ultimate adverse impact to Humana of COVID-19. Humana is
continuing to monitor the spread of COVID-19, changes to the
company’s benefit coverages, and the ongoing costs and business
impacts of dealing with COVID-19, including the potential costs and
impacts associated with lifting or reimposing restrictions on
movement and economic activity, the timing and degree in resumption
of demand for deferred healthcare services, the pace of
administration of COVID-19 vaccines and the effectiveness of those
vaccines, and related risks. The magnitude and duration of the
pandemic remain uncertain, and its impact on Humana’s business,
results of operations, financial position, and cash flows could be
material.
In making forward-looking statements, Humana is not undertaking
to address or update them in future filings or communications
regarding its business or results. In light of these risks,
uncertainties, and assumptions, the forward-looking events
discussed herein may or may not occur. There also may be other
risks that the company is unable to predict at this time. Any of
these risks and uncertainties may cause actual results to differ
materially from the results discussed in the forward-looking
statements.
Humana advises investors to read the following documents as
filed by the company with the SEC for further discussion both of
the risks it faces and its historical performance:
- Form 10-K for the year ended December 31, 2021;
- Form 10-Q for the quarter ended March 31, 2022; and
- Form 8-Ks filed during 2022.
About Humana
Humana Inc. (NYSE: HUM) is committed to helping our millions of
medical and specialty members achieve their best health. Our
successful history in care delivery and health plan administration
is helping us create a new kind of integrated care with the power
to improve health and well-being and lower costs. Our efforts are
leading to a better quality of life for people with Medicare,
families, individuals, military service personnel, and communities
at large.
To accomplish that, we support physicians and other health care
professionals as they work to deliver the right care in the right
place for their patients, our members. Our range of clinical
capabilities, resources and tools – such as in-home care,
behavioral health, pharmacy services, data analytics and wellness
solutions – combine to produce a simplified experience that makes
health care easier to navigate and more effective.
More information regarding Humana is available to investors via
the Investor Relations page of the company’s website at humana.com,
including copies of:
- Annual reports to stockholders
- Securities and Exchange Commission filings
- Most recent investor conference presentations
- Quarterly earnings news releases and conference calls
- Calendar of events
- Corporate Governance information
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220727005316/en/
Lisa Stoner Humana Investor Relations (502) 580-2652 e-mail:
LStamper@humana.com Mark Taylor Humana Corporate Communications
(317) 753-0345 e-mail: MTaylor108@humana.com
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