Humana 2008 Annual Report Download - page 18

VA health care delivery system through our network of providers. We are compensated by the VA for the cost of
our providers’ services at a specified contractual amount per service plus an additional administrative fee for
each transaction. The contract, under which we began providing services on January 1, 2008, is comprised of one
base period and four one-year option periods subject to renewals at the federal government’s option. We are
currently in the first option period, which expires on September 30, 2009. For the year ended December 31, 2008,
revenues under this VA contract were approximately $22.7 million, or less than 1% of our total premium and
ASO fees.
For the year ended December 31, 2008, military services premium revenues were approximately $3.2
billion, or 11.3% of our total premiums and ASO fees, and military services ASO fees totaled $76.8 million, or
0.3% of our total premiums and ASO fees.
International and Green Ribbon Health Operations
In August 2006, we established our subsidiary Humana Europe in the United Kingdom to provide
commissioning support to Primary Care Trusts, or PCTs, in England. Under the contracts we are awarded, we
work in partnership with local PCTs, health care providers, and patients to strengthen health-service delivery and
to implement strategies at a local level to help the National Health Service enhance patient experience, improve
clinical outcomes, and reduce costs. For the year ended December 31, 2008, revenues under these contracts were
approximately $7.7 million, or less than 1% of our total premium and ASO fees.
We participated in a Medicare Health Support pilot program through Green Ribbon Health, or GRH, a joint-
venture company with Pfizer Health Solutions Inc. GRH was designed to support CMS assigned Medicare
beneficiaries living with diabetes and/or congestive heart failure in Central Florida. GRH used 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 over
the period which began November 1, 2005 and ended August 15, 2008 are subject to refund unless savings,
satisfaction, and clinical improvement targets are met. Under the terms of the contract, after a claims run-out
period, CMS is required to deliver a performance report during the third quarter of 2009. To date, all revenues
have been deferred until reliable estimates are determinable, and revenues are not expected to be material when
recognized.
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
670,000 members at December 31, 2008, representing approximately 18.5% of our total commercial medical
membership as detailed below.
Smart Plans and
Other Consumer
Membership
Other Commercial
Membership
Commercial
Medical
Membership
Fully-insured ...................... 392,500 1,586,300 1,978,800
ASO............................. 277,500 1,364,500 1,642,000
Total Commercial medical ....... 670,000 2,950,800 3,620,800
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.
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