Humana 2007 Annual Report Download - page 18

We participate in a Medicare Health Support pilot program through Green Ribbon Health, or GRH, a joint-
venture company with Pfizer Health Solutions Inc. GRH is designed to support Medicare beneficiaries living
with diabetes and/or congestive heart failure in Central Florida. GRH uses disease management initiatives
including evidence-based clinical guidelines, personal self-directed change strategies, and personal nurses to help
participants navigate the health system. Revenues under the contract with CMS, which expires October 31, 2008
unless terminated earlier, are subject to refund unless a savings target is met. To date, all revenues have been
deferred until reliable estimates are determinable.
Our Products Marketed to Commercial Segment Employers and Members
Smart Plans and Other Consumer Products
Over the last several years, we have developed and offered various commercial products designed to
provide options and choices to employers that are annually facing substantial premium increases driven by
double-digit medical cost inflation. These Smart plans, discussed more fully below, and other consumer
offerings, which can be offered on either a fully-insured or ASO basis, provided coverage to approximately
564,700 members at December 31, 2007, representing approximately 16.4% of our total commercial medical
membership as detailed below.
Smart Plans and
Other Consumer
Membership
Other Commercial
Membership
Commercial
Medical
Membership
Fully-insured ...................... 327,900 1,480,700 1,808,600
ASO............................. 236,800 1,406,200 1,643,000
Total Commercial medical ....... 564,700 2,886,900 3,451,600
These products are often offered to employer groups as “bundles”, where the subscribers are offered various
HMO and PPO options, with various employer contribution strategies as determined by the employer.
Paramount to our product strategy, we have developed a group of innovative consumer products, styled as
“Smart” products, that we believe will be a long-term solution for employers. We believe this new generation of
products provides more (1) choices for the individual consumer, (2) transparency of provider costs, and
(3) benefit designs that engage consumers in the costs and effectiveness of health care choices. Innovative tools
and technology are available to assist consumers with these decisions, including the trade-offs between higher
premiums and point-of-service costs at the time consumers choose their plans, and to suggest ways in which the
consumers can maximize their individual benefits at the point they use their plans. We believe that when
consumers can make informed choices about the cost and effectiveness of their health care, a sustainable long
term solution for employers can be realized. Smart products, which accounted for approximately 55% of
enrollment in all of our consumer-choice plans as of December 31, 2007, are only sold to employers who use
Humana as their sole health insurance carrier.
Some employers have selected other types of consumer-choice products, such as, (1) a product with a high
deductible, (2) a catastrophic coverage plan, or (3) ones that offer a spending account option in conjunction with
more traditional medical coverage or as a stand alone plan. Unlike our Smart products, these products, while
valuable in helping employers deal with near-term cost increases by shifting costs to employees, are not
considered by us to be long-term comprehensive solutions to the employers’ cost dilemma, although we view
them as an important interim step.
HMO
Our commercial HMO products provide prepaid health insurance coverage to our members through a
network of independent primary care physicians, specialty physicians, and other health care providers who
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