Humana 2013 Annual Report Download - page 58

• On October 1, 2013, the initial open enrollment period began for plans effective January 1, 2014
offered through federally facilitated, federal-state partnerships or state-based exchanges for individuals
and small employers (with up to 100 employees), including certain metropolitan areas in the 14 states
where we have public exchange offerings. In addition, federal and state regulatory changes in
December 2013 extended the enrollment deadline for January 1, 2014 insurance coverage from
December 15, 2013 to December 24, 2013, required plans to accept payment for policies with a start
date of January 1, 2014 as late as December 31, 2013 (we voluntarily extended our deadline for
payment to January 31, 2014 and voluntarily extended our deadline for payment to February 28, 2014
for policies with a start date of February 1). The December regulations also allowed certain individuals
to remain in their existing underwritten off-exchange health plans that are not compliant with the
Health Care Reform Law, which has led to much higher retention of our existing underwritten off-
exchange health plans. We believe that this is occurring at other carriers as well and will result in an
overall deterioration of the risk pool in plans compliant with the Health Care Reform Law, as more
previously underwritten members remain with their current carriers rather than enter the exchanges.
However, we expect that the commercial risk adjustment, risk corridor, and reinsurance provisions of
the Health Care Reform Law will mitigate this deterioration to some extent.
Enrollment applications for our 2014 health care exchange offerings exceeded 200,000 through
January 31, 2014. Applicants are required to pay their premiums to be enrolled in our plans. The health
care exchange open enrollment process began on October 1, 2013 and continues through March 31,
2014.
Employer Group Segment
• As discussed in the detailed Employer Group segment results of operations discussion that follows, the
Employer Group segment pretax income improved 16.2% for the year ended December 31, 2013.
• Fully-insured group Medicare Advantage membership of 429,100 at December 31, 2013 increased
58,300 members, or 15.7%, from 370,800 at December 31, 2012 primarily due to the January 2013
addition of a new large group retirement account.
• Membership in HumanaVitality®, our wellness and loyalty rewards program, rose 66% to 2,831,000 at
December 31, 2013 from 1,705,400 at December 31, 2012.
Healthcare Services Segment
• As discussed in the detailed Healthcare Services segment results of operations discussion that follows,
our Healthcare Services segment pretax income improved 18.6% for the year ended December 31,
2013.
• Improvement in the quality of care for members is a key element of our integrated care delivery model.
We have accelerated our process for identifying and reaching out to members in need of clinical
intervention. At December 31, 2013, we had approximately 280,200 members with complex chronic
conditions in the Humana Chronic Care Program, an 86% increase compared with approximately
151,000 members at December 31, 2012, reflecting enhanced predictive modeling capabilities and
focus on proactive clinical outreach and member engagement, particularly for our Medicare Advantage
membership. We believe these initiatives lead to better health outcomes for our members and lower
health care costs.
• Year-over-year comparisons of results for the Healthcare Services segment are impacted by the
December 21, 2012 acquisition of Metropolitan Health Networks, Inc., or Metropolitan, and the July 6,
2012 acquisition of SeniorBridge Family Companies, Inc., or SeniorBridge. Metropolitan is a Medical
Services Organization, or MSO, that coordinates medical care for Medicare Advantage beneficiaries
and Medicaid recipients, primarily in Florida. SeniorBridge is a chronic-care provider of in-home care
for seniors that expanded our existing clinical and home health capabilities and strengthened our
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