Humana 2014 Annual Report Download - page 13

5
Our Retail Segment Products
This segment is comprised of products sold on a retail basis to individuals including medical and supplemental
benefit plans described in the discussion that follows. The following table presents our premiums and services revenue
for the Retail segment by product for the year ended December 31, 2014:
Retail Segment
Premiums and
Services Revenue
Percent of
Consolidated
Premiums and
Services Revenue
(dollars in millions)
Premiums:
Individual Medicare Advantage $ 25,941 53.9%
Medicare stand-alone PDP 3,396 7.1%
Total Retail Medicare 29,337 61.0%
Individual commercial 3,265 6.8%
State-based Medicaid 1,096 2.3%
Individual specialty 256 0.4%
Total premiums 33,954 70.5%
Services 39 0.1%
Total premiums and services revenue $ 33,993 70.6%
Individual Medicare
We have participated in the Medicare program for private health plans for over 30 years and have established a
national presence, offering at least one type of Medicare plan in all 50 states. We have a geographically diverse
membership base that we believe provides us with greater ability to expand our network of PPO and HMO providers.
We employ strategies including health assessments and clinical guidance programs such as lifestyle and fitness programs
for seniors to guide Medicare beneficiaries in making cost-effective decisions with respect to their health care. We
believe these strategies result in cost savings that occur from making positive behavior changes.
Medicare is a federal program that provides persons age 65 and over and some disabled persons under the age of
65 certain hospital and medical insurance benefits. CMS, an agency of the United States Department of Health and
Human Services, administers the Medicare program. Hospitalization benefits are provided under Part A, without the
payment of any premium, for up to 90 days per incident of illness plus a lifetime reserve aggregating 60 days. Eligible
beneficiaries are required to pay an annually adjusted premium to the federal government to be eligible for physician
care and other services under Part B. Beneficiaries eligible for Part A and Part B coverage under traditional fee-for-
service Medicare are still required to pay out-of-pocket deductibles and coinsurance. Throughout this document this
program is referred to as Medicare FFS. As an alternative to Medicare FFS, in geographic areas where a managed care
organization has contracted with CMS pursuant to the Medicare Advantage program, Medicare beneficiaries may
choose to receive benefits from a Medicare Advantage organization under Medicare Part C. Pursuant to Medicare Part
C, Medicare Advantage organizations contract with CMS to offer Medicare Advantage plans to provide benefits at least
comparable to those offered under Medicare FFS. Our Medicare Advantage plans are discussed more fully below.
Prescription drug benefits are provided under Part D.
Individual Medicare Advantage Products
We contract with CMS under the Medicare Advantage program to provide a comprehensive array of health insurance
benefits, including wellness programs, chronic care management, and care coordination, to Medicare eligible persons
under HMO, PPO, and Private Fee-For-Service, or PFFS, plans in exchange for contractual payments received from
CMS, usually a fixed payment per member per month. With each of these products, the beneficiary receives benefits
in excess of Medicare FFS, typically including reduced cost sharing, enhanced prescription drug benefits, care
coordination, data analysis techniques to help identify member needs, complex case management, tools to guide