Humana 2012 Annual Report Download - page 17

Individual Medicare Stand-Alone Prescription Drug Products
We offer stand-alone prescription drug plans, or PDPs, under Medicare Part D, including a PDP plan
co-branded with Wal-Mart Stores, Inc., or the Humana-Walmart plan. Generally, Medicare-eligible individuals
enroll in one of our plan choices between October 15 and December 7 for coverage that begins on the following
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. Our revenues from CMS and the beneficiary are determined from our
PDP 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 2013, and
all of our product offerings filed with CMS for 2013 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 individuals in the
United States in 2012. 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, 2012, we served approximately 285,500 dual
eligible members in our Medicare Advantage plans and approximately 697,300 dual eligible members in our
stand-alone prescription drug plans. During 2012, we were successful in our bids for Medicaid business in Ohio,
Illinois, and Kentucky, including dual eligible beneficiaries in both Ohio and Illinois. We partnered with
CareSource Management Group Company to serve the Ohio and Kentucky individuals under a March 2012
strategic alliance agreement.
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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