Humana 2011 Annual Report Download - page 17

contracts accounted for premiums revenue of approximately $5.6 billion, which represented approximately 31%
of our individual Medicare Advantage premiums revenue, or 15% of our consolidated premiums and services
revenue for the year ended December 31, 2011.
Our HMO, PPO, and PFFS products covered under Medicare Advantage contracts with CMS are renewed
generally for a calendar year term unless CMS notifies us of its decision not to renew by August 1 of the calendar
year in which the contract would end, or we notify CMS of our decision not to renew by the first Monday in June
of the calendar year in which the contract would end. All material contracts between Humana and CMS relating
to our Medicare Advantage products have been renewed for 2012, and all of our product offerings filed with
CMS for 2012 have been approved.
Individual Medicare Stand-Alone Prescription Drug Products
We offer stand-alone prescription drug plans, or PDPs, under Medicare Part D. Generally, Medicare-eligible
individuals enroll in one of our plan choices between October 15 and December 7 for coverage that begins on
January 1. Our stand-alone PDP offerings consist of plans offering basic coverage with benefits mandated by
Congress, as well as plans providing enhanced coverage with varying degrees of out-of-pocket costs for
premiums, deductibles, and co-insurance. In October 2010, we announced the lowest premium national stand-
alone Medicare Part D prescription drug plan co-branded with Wal-Mart Stores, Inc., the Humana Walmart-
Preferred Rx Plan. This plan was first offered for the 2011 plan year. Our revenues from CMS and the
beneficiary are determined from our bids submitted annually to CMS. These revenues also reflect the health
status of the beneficiary and risk sharing provisions as more fully described in Item 7. Management’s Discussion
and Analysis of Financial Condition and Results of Operations under the section titled “Medicare Part D
Provisions.” Our stand-alone PDP contracts with CMS are renewed generally for a calendar year term unless
CMS notifies us of its decision not to renew by August 1 of the calendar year in which the contract would end, or
we notify CMS of our decision not to renew by the first Monday in June of the calendar year in which the
contract would end. All material contracts between Humana and CMS relating to our Medicare stand-alone PDP
products have been renewed for 2012, and all of our product offerings filed with CMS for 2012 have been
approved.
Medicare and Medicaid Dual Eligible
Medicare beneficiaries who also qualify for Medicaid due to low income or special needs are known as dual
eligible beneficiaries, or dual eligibles. There were approximately 9 million dual eligible enrollees in 2011. These
dual eligibles may enroll in a privately-offered Medicare Advantage product, but may also receive assistance
from Medicaid for Medicaid benefits, such as nursing home care and/or assistance with Medicare premiums and
cost sharing. As of December 31, 2011, we served approximately 242,000 dual eligible members in our Medicare
Advantage plans and approximately 482,000 dual eligible members in our stand-alone prescription drug plans.
Individual Commercial Coverage
Our individual health plans, marketed under the HumanaOne®brand include offerings designed to promote
wellness and engage consumers. HumanaOne plans are designed specifically for self-employed entrepreneurs,
small-business employees, part-time workers, students, and early retirees and include a broad spectrum of major
medical benefits with multiple in-network coinsurance levels and annual deductible choices, as well as
HumanaVitality®, our wellness and loyalty rewards program.
Our HumanaOne plans primarily are offered as PPO plans in select markets where we can generally
underwrite risk and utilize our existing networks and distribution channels. This individual product includes
provisions mandated by law to guarantee renewal of coverage for as long as the individual chooses.
The HumanaOne plans can be further customized with optional benefits such as dental, vision, life, and a
broad portfolio of financial protection products.
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