Humana 2008 Annual Report Download - page 3
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In Medicare Advantage, the expansion
of our provider networks and our
success in attracting increasing numbers
of Private Fee-for-Service members to
our network-based products positions
us well as we prepare for changes in
the Medicare program that will
effectively eliminate the traditional
Private Fee-for-Service plan option
in 2011. This is shown in the 2009
enrollment season that began in the
last several weeks of 2008. During this
period, we saw substantial progression
in the number of members choosing
to enroll in a network-based plan,
with nearly 60 percent in such plans
in January 2009, up from 51 percent
at the end of 2008.
In the company’s stand-alone Medicare
Prescription Drug Plans (PDP), our
processes were strengthened to ensure
the issues that negatively impacted net
income in 2008 were corrected prior to
submitting, in June 2008, our plan bids
for 2009, with no lingering effects
expected on these plans or on any
other portions of Humana’s business.
As expected, the 2009 plan bids
resulted in the attrition of approximately
924,000 stand-alone PDP members
in January 2009.
The combined impact of continued
growth in our Medicare Advantage
products and attrition in our stand-alone
PDP offerings brought our total
medical membership to approximately
10.6 million in January 2009. For 2008,
company revenues increased by
15 percent, to $28.95 billion from
$25.29 billion in 2007. Net income
for 2008 was $647 million, or $3.83
per diluted share.
Michael B. McCallister
David A. Jones, Jr.
Despite the challenges of the global
economic environment, at Humana in
2008 we extended our reputation as the
consumer leader in health benefi ts, pioneered
new forms of health and wellness for our
more than 11 million health plan members
and made signifi cant strides in preparing
our Medicare plans for the coming infl ux
of the baby boomer generation. In addition,
the company’s Commercial business showed
membership gains in strategic areas like small
group and individual, while our military business
continued its successful, 14-year relationship
with the Department of Defense.
To Our Stockholders:
2008 Annual Report 1