What Humana’s Shortfall May Mean for 2017

Health insurer, Humana Inc., says it will most likely fall short of being able to cover costs for individual consumer health plans and will set aside premium deficiency reserves, funds earmarked to cover the difference.

Humana’s announcement comes on the heels of news from United Health Care , the largest health insurer in the U.S, who indicated they may exit the PPACA exchange market in 2017 due to losses and higher than expected medical costs.

Because of Humana’s focus on Medicare Advantage, a private-sector alternative that provides Medicare Hospital Insurance (Part A) and Medical Insurance (Part B)) from the plan instead of original Medicare, they expect to add between 100,000 and 120,000 new policies in their individual plans. Their prescription-drug plan is expected to add close to $330,000 customers. However, their Medicare Advantage group plan membership is down by almost 125,000 members which they indicated in their recent filing with the U.S. Securities and Exchange Commission as  being “primarily due to the previously disclosed loss of a large account that moved to a private exchange.”

While the company is still trying to determine the size of their shortfall, many analysts expect them to exit the Health Insurance Exchange in 2017.