Humana 2014 Annual Report Download - page 67
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59
Change
2013 2012 Dollars Percentage
(in millions)
Premiums and Services Revenue:
Premiums:
Fully-insured commercial group $ 5,117 $ 4,996 $ 121 2.4 %
Group Medicare Advantage 4,710 4,064 646 15.9 %
Group Medicare stand-alone PDP 8 8 — — %
Total group Medicare 4,718 4,072 646 15.9 %
Group specialty 1,095 1,070 25 2.3 %
Total premiums 10,930 10,138 792 7.8 %
Services 359 371 (12) (3.2)%
Total premiums and services revenue $ 11,289 $ 10,509 $ 780 7.4 %
Income before income taxes $ 350 $ 312 $ 38 12.2 %
Benefit ratio 83.5% 83.6% (0.1)%
Operating cost ratio 15.9% 16.2% (0.3)%
Pretax Results
• Employer Group segment pretax income increased $38 million, or 12.2%, to $350 million in 2013 reflecting
improved operating performance primarily due to group Medicare Advantage membership growth and lower
benefit and operating cost ratios, as described below.
Enrollment
• Fully-insured commercial group medical membership increased 25,200 members, or 2.1% from December 31,
2012 as higher small group business membership was partially offset by lower membership in large group
accounts. Approximately 61% of our fully-insured commercial group medical membership was in small group
accounts at December 31, 2013 compared to 59% at December 31, 2012.
• Fully-insured group Medicare Advantage membership increased 58,300 members, or 15.7%, from
December 31, 2012 to December 31, 2013 primarily due to the January 2013 addition of a new large group
retirement account.
• Effective January 1, 2013 we lost our sole group Medicare Advantage ASO account which had 27,700 members
at December 31, 2012.
• Group ASO commercial medical membership decreased 74,900 members, or 6.1%, from December 31, 2012
to December 31, 2013 primarily due to continued pricing discipline in a highly competitive environment for
self-funded accounts.
• Group specialty membership decreased 355,400 members, or 5.0%, from December 31, 2012 to December 31,
2013 primarily due to a decline in vision membership related to our planned discontinuance of certain
unprofitable product distribution partnerships.
Premiums revenue
• Employer Group segment premiums increased $792 million, or 7.8%, from 2012 to 2013 primarily due to
higher average group Medicare Advantage medical membership.
Benefits expense
• The Employer Group segment benefit ratio decreased 10 basis points from 83.6% in 2012 to 83.5% in 2013
primarily due to higher favorable prior-year medical claims reserve development, partially offset by growth