Humana says the company as a whole is doing well, but that its individual health operations are doing much worse than it had expected.
The Louisville, Kentucky-based health insurance giant says it will sell individual health coverage through the Affordable Care Act public exchange system in more than 156 counties in 11 states in 2017, down from 1,351 counties in 19 states this year.
That will reduce the number of counties in which it sells individual exchange plans by at least about 88 percent.
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The company is pulling out of the off-exchange individual health insurance market in all states.
The company started the year with about 1.1 million individual health enrollees. The company provides or administers coverage for about 14 million people.
The company predicts those changes will reduce its revenue from fully ACA-compliant individual health coverage to about $750 million to $1 billion next year, from about $3.4 billion this year.
The company also is recording two charges related to the individual health business: a $208 million increase in its individual health premium deficiency reserve for 2016, and a $52 million charge related to the ACA risk management programs and claims from earlier quarters.
The company put $176 million in a 2016 premium deficiency reserve in the fourth quarter of 2015. The new move appears to increase the total premium deficiency reserve to $384 million.
Humana says its Medicare Advantage and health care services businesses are doing better than it expected, and that it expects the improvement in the Medicare Advantage and health care services units to offset the impact of the poor individual health results on its full results for the second quarter.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
