Category: HUM

Humana Inc. (HUM Quick QuoteHUM – Free Report) shares have climbed 9.7% in the past year against the 7.9% decline of the industry. Several contract wins and renewals, a strong Medicaid business and efficient capital deployment are driving the stock.

Image Source: Zacks Investment Research

Headquartered in Louisville, KY, Humana is one of the largest healthcare plan providers in the United States. The company also provides other benefits with specialty products, including dental, vision and other supplementary benefits. It has a market cap of $60.2 billion.

Can it Retain Momentum?

The answer is yes and before we get into the details, let us show you how its estimates for the full-year 2023 stand.

The Zacks Consensus Estimate for Humana’s 2023 earnings is pegged at $28.06 per share, indicating an increase of 11.2% from the 2022 level. The company beat earnings estimates in all the last four quarters, with an average of 13%.

The consensus estimate for 2023 revenuesstands at $103.6 billion, indicating an 11.5% increase from the 2022 level.

Now let’s delve into what might drive this Zacks Rank #3 (Hold) stock.

The company projects individual Medicare Advantage membership to witness a minimum membership growth of 625,000 or 13.7% year over year in 2023. This will likely help the company to increase premiums.

Its solid Medicaid business boasts multiple contract wins in different states. Also, its strategic acquisitions help the company scale its business and improve its product suite. Management also does not shy away from shedding non-core assets to improve profitability and focus on more lucrative assets. The company remains optimistic to fulfil its target of attaining adjusted earnings of $37 per share within 2025.

Humana closed the sale of a 60% stake in its Kindred at Home subsidiary’s Hospice and Personal Care segments to private investment firm Clayton, Dubilier & Rice to boost efficiency and keep costs down. HUM retained the remaining 40% stake to gain from the standalone company’s long-term success. These strategic initiatives set the company up for long-term growth.

Its balance sheet strength is praiseworthy. As of Dec 31, 2022, the company had cash, cash equivalents and investment securities of $13.9 billion, significantly higher than its long-term debt of $9 billion. Its cash balance of $5.1 billion can easily manage the short-term debt of $2.1 billion.

Rising operating cash flows help the company take shareholder value boosting measures. The metric more than doubled in 2022 to almost $4.6 billion. In February 2023, the company’s board of directors approved a 12.4% increase in the quarterly dividend. As of Jan 31, 2023, it had $1 billion left under the repurchase authorization.

Risks

Despite the upside potential, there are a few factors that can play spoilsport. Rising expenses are weighing on HUM’s margins. Our estimate suggests total operating costs to jump nearly 10% this year. Also, its return on equity of 20.5% is lower than the industry average of 24.6%.

Key Picks in Medical Space

Meanwhile, investors interested in the broader medical space may look at players like Avanos Medical, Inc. (AVNS Quick QuoteAVNS – Free Report) , Viemed Healthcare, Inc. (VMD Quick QuoteVMD – Free Report) and BioLife Solutions, Inc. (BLFS Quick QuoteBLFS – Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Avanos Medical’s 2023 earnings predicts 1.8% year-over-year growth. AVNS beat earnings estimates in all the past four quarters, with the average being 11%.

The consensus mark for Viemed’s 2023 earnings indicates an 87.5% year-over-year increase. Furthermore, the consensus estimate for VMD’s revenues in 2023 suggests 15% year-over-year growth.

The Zacks Consensus Estimate for BioLife Solutions’ 2023 earnings suggests 84.2% year-over-year growth. Also, the consensus mark for BLFS’ 2023 revenues suggests 19.1% year-over-year growth.

Humana Inc. (HUM Quick QuoteHUM – Free Report) completes its previously announced buyout of Kindred at Home or KAH, which is the nation’s largest home health and hospice company. The deal, which was announced in April this year, strengthened the company’s position as the nation’s leading home-care provider. This is expected to enhance health outcomes of patients who prefer care at home.

Demand for at-home care is at its peak right now and expected to continue for years to come. The leading health insurer is committed to providing clinical care across its lines of business.

KAH caregivers offer home health, hospice and personal care services to more than 550,000 patients every year. Addition of their skills will help Humana expand its home health offering with focus on clinical innovation, better patient outcomes, cost reduction for availing medical care, etc.

In this regard, KAH’s home health operations are integrated into the acquirer’s Home Solutions business. The same will adopt the latter’s new payer-agnostic healthcare services brand CenterWell, which is set to transition to CenterWell Home Health beginning 2022.

The health insurer acquired 40% ownership stake in Kindred for $2.4 billion in 2018. The buyout of the remaining interest will allow it to more quickly scale up its plans to launch value-based care models and innovative care.

In June, Humana inked a deal to purchase the home health provider One Homecare Solutions (onehome) from the private equity group WayPoint Capital Partners. These deals definitely place this currently Zacks Rank #3 (Hold) company as a value-based home health care provider on a national scale. You can see  the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

These strategic initiatives carved a growth path for the company. Some of the acquisitions made by the company helped it achieve long-term growth.
These include the purchase of Family Physicians Group, Your Home Advantage and Curo among others, which aided the company to widen its reach in the home health and hospice market.

Humana also closed the Enclara deal in January, expanding its hospice pharmacy business line. The company announced its iCare buyout in Wisconsin during December 2020, which extended its Medicare business.
The health insurance industry is poised for tremendous growth in the long term, driven by the aging U.S. population, patients’ desire for independence and the emergence of home health as a cheaper care modality. Players in the industry should continue to benefiting from the demographics of U.S. senior citizens and the need for looking after higher-acuity patients in a home-nursing environment.  

Price Performance

Shares of Humana have lost 0.8% in a year’s time against its  industry’s growth of 29.4%.

Image Source: Zacks Investment Research

Other companies in the same space, such as Anthem Inc. (ANTM Quick QuoteANTM – Free Report) , Centene Corporation (CNC Quick QuoteCNC – Free Report) and The Joint Corp. (JYNT Quick QuoteJYNT – Free Report) have gained 32.7%, 0.6% and 370.5% each in the same time frame.

SAN ANTONIO–(BUSINESS WIRE)–Leading health and well-being company Humana Inc. (NYSE: HUM) today announced it is looking to hire up to 200 virtual, seasonal Enrollment Representatives in and around San Antonio.

Humana’s Medicare Enrollment Representatives respond to inquiries from current and prospective members seeking to enroll into a 2022 Medicare Advantage or Prescription Drug Plan. They also review and process member applications.

These seasonal employees will serve for six months or less through the Medicare Advantage and Prescription Drug Plan open enrollment window, which runs from Oct. 15 to Dec. 7, 2021. Although these positions are home-based, Humana is seeking applicants who live within a 50-mile radius of the company’s San Antonio location at 8119 Datapoint Dr., as there may be opportunities for some of these roles to transition to full-time employment.

These positions offer competitive compensation with a strong hourly rate and eligibility for a retention bonus up to $1000.

Virtual interviews begin this month and start dates for the Enrollment Representatives will range from late August through October. Humana is looking for professionals with customer service experience, attention to detail, and proficiency in Microsoft Outlook and Excel. Candidates interested in the seasonal positions can apply online at careers.humana.com and enter #HumanaSeasonalJobs in the keyword search box.

Humana is working with a number of community organizations to recruit candidates for these positions.

Humana, a Fortune 41 company, has a number of full-time roles available across the organization, in addition to these seasonal roles.

About Humana

Humana Inc. (NYSE: HUM) is committed to helping our millions of medical and specialty members achieve their best health. Our successful history in care delivery and health plan administration is helping us create a new kind of integrated care with the power to improve health and well-being and lower costs. Our efforts are leading to a better quality of life for people with Medicare, families, individuals, military service personnel, and communities at large.

To accomplish that, we support physicians and other health care professionals as they work to deliver the right care in the right place for their patients, our members. Our range of clinical capabilities, resources and tools – such as in-home care, behavioral health, pharmacy services, data analytics and wellness solutions – combine to produce a simplified experience that makes health care easier to navigate and more effective.

More information regarding Humana is available to investors via the Investor Relations page of the company’s web site at www.humana.com, including copies of:

• Annual reports to stockholders
• Securities and Exchange Commission filings
• Most recent investor conference presentations
• Quarterly earnings news releases and conference calls
• Calendar of events
• Corporate Governance information

LOUISVILLE, Ky.–(BUSINESS WIRE)–Leading health and well-being company Humana Inc. (NYSE: HUM) announced today that for the second consecutive year, it is ranked #1 in Florida and Texas in the J.D. Power ranking of Commercial Member Health Plans. Humana has a long history serving customers in both states, from employer customers and their employees, to Medicare, Medicaid and military members with TRICARE coverage.

The J.D. Power 2021 U.S. Commercial Member Health Plan Study focused on the member experience with the health plan, and includes feedback from both small and large employers. The study ranks health plans in six categories: Coverage and Benefits; Cost; Provider Choice; Information and Communication; Customer Service; and Billing and Payment. Humana ranked #1 in overall member satisfaction and also across all six measured categories in Florida and Texas in 2020, and again in 2021.

“It is an honor to be rated #1 by our commercial members in Florida and Texas for the second year in a row for both overall member satisfaction and across all six categories J.D. Power tracks. The fact that this recognition comes from our members makes this award particularly meaningful,” said Chris Hunter, President, Humana Group, Military & Specialty Segment. “As always, and especially in the face of a global pandemic, our associates worked day in and day out to meet the needs of our members, employers and partners. Our efforts in Florida, Texas and around the country helped to provide even greater access to affordable COVID testing, treatment and other health care needs necessary to navigate the crisis to millions of consumers.”

For its 2021 Commercial Member Health Plan Study, J.D. Power collected data from health plan members from January to March of 2021. The national study was conducted among Commercial HMO, PPO and POS health plan members, and is based on responses across 150 different health plans in 22 market-based U.S. regions.

“This recognition further reinforces our commitment to provide our members and stakeholders with the high-touch support they have come to expect from Humana,” Hunter added. “Our human care approach to serving our members has become a part of how we do business. We provide our members an exceptional experience inclusive of a wide array of innovative, affordable products and access to trusted, high-quality doctors and physicians. Achieving the #1 ranking for the second year in a row underscores that our efforts have made a difference to our members, and we remain committed to continuing to strengthen our offerings not just in Florida and Texas, but across the country.”

About Humana

Humana Inc. (NYSE: HUM) is committed to helping our millions of medical and specialty members achieve their best health. Our successful history in care delivery and health plan administration is helping us create a new kind of integrated care with the power to improve health and well-being and lower costs. Our efforts are leading to a better quality of life for people with Medicare, families, individuals, military service personnel, and communities at large.

To accomplish that, we support physicians and other health care professionals as they work to deliver the right care in the right place for their patients, our members. Our range of clinical capabilities, resources and tools – such as in-home care, behavioral health, pharmacy services, data analytics and wellness solutions – combine to produce a simplified experience that makes health care easier to navigate and more effective.

More information regarding Humana is available to investors via the Investor Relations page of the company’s web site at www.humana.com, including copies of:

• Annual reports to stockholders
• Securities and Exchange Commission filings
• Most recent investor conference presentations
• Quarterly earnings news releases and conference calls
• Calendar of events
• Corporate Governance information

Humana Inc.’s (HUM Quick QuoteHUM – Free Report) fourth-quarter 2020 operating loss per share of $2.30 is lower than the Zacks Consensus Estimate of a loss of $2.35. This was on account of steep COVID-related treatment and testing costs, high marketing expenses related to the Medicare Advantage Annual Election Period (AEP) as well as continuous relief efforts and strategic measures in its integrated care delivery models. The bottom line, however, came against the year-ago quarter’s earnings per share of $2.28.

Operational Update

Revenues of $19 billion were up 17% year over year. Moreover, the top line surpassed the Zacks Consensus Estimate by 1.3% on the back of better premium revenues from Medicare Advantage along with improved membership in state-based contracts and an increase in per member Medicare Advantage premiums.

Benefit ratio expanded 170 basis points (bps) to 88.3%.

Operating cost ratio expanded 310 bps to 16.3%.

Total expenses shot up 21.8% year over year due to higher benefits and operating costs.

Segmental Results

Retail

Revenues from the Retail segment were $16.83 billion, up 18% year over year. This can primarily be attributed to premium rise owing to Medicare Advantage along with state-based contracts membership growth and higher per member Medicare Advantage premiums.

Benefit ratio of 87% expanded 70 bps year over year due to meaningful COVID-19 treatment and testing costs, pandemic-related relief efforts along with strategic measures taken in the integrated care delivery model. Shift in Medicare membership mix and growth in Medicare Advantage members are other reasons.

The segment’s operating cost ratio of 14% expanded 240 bps year over year due to reinstatement of the non-deductible health insurance industry fee in 2020 along with COVID-related costs. Other reasons are strategic initiatives in its integrated care delivery model and high costs related to Medicare AEP.

Group and Specialty

Revenues from the Group and Specialty segment were $1.79 billion, down 4% from the prior-year quarter due to reduction in fully-insured group commercial membership.

Benefit ratio expanded 910 bps year over year to 104.3% due to expenses involving the ongoing pandemic relief, strategic initiatives in the business as well as COVID-related treatment and testing expenses.

Operating cost ratio expanded 570 bps year over year to 28.1%.

Healthcare Services

Revenues of $7.29 billion increased 9% year over year, primarily owing to Medicare Advantage membership growth and additional pharmacy revenues associated with the Enclara Healthcare buyout.

Operating cost ratio expanded 100 bps year over year to 97.8% due to coronavirus-related administrative costs as well as expenses incurred in the pharmacy business for timely delivery of prescriptions. Additional investment in the segment’s provider business associated with marketing and AEP measures also bothers.

Financial Update

As of Dec 31, 2020, the company had cash and cash equivalents, and investment securities of $17.2 billion, up 14.6% from the level at 2019 end.
Debt-to-total capitalization as of Dec 31, 2020 was 32.7%, expanding 70 bps from the level as of Dec 31, 2019.

As of Dec 31, 2020, cash flows provided by operating activities came in at $5.6 billion, up 6.7% year over year.

Capital Deployment

In December, Humana inked two separate deals with two third-party financial institutions to effect an aggregate $1.75 billion ASR program under its authorization. The company repurchased around 3,829,400 shares in the quarter under this plan.

It paid out cash dividends worth $84 million in the period.

2021 Guidance

After announcing fourth-quarter results, the company issued its 2021 guidance. Adjusted EPS is expected in the range of $21.25-$21.75.

For the full year, the company expects individual Medicare Advantage membership growth of around 425,000-475,000 members.

Zacks Rank and Performance of Other Players

Humana carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among other players from the medical space that have reported fourth-quarter earnings so far, the bottom-line results of UnitedHealth Group Incorporated (UNH Quick QuoteUNH – Free Report) and HCA Healthcare Inc. (HCA Quick QuoteHCA – Free Report) beat respective estimates while that of Anthem, Inc. (ANTM Quick QuoteANTM – Free Report) missed the same.

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Humana Inc. (HUM Quick QuoteHUM – Free Report) is enhancing health plan options for individuals eligible for Medicare in Massachusetts by offering its Humana Medicare Advantage health plans in the state for the first time.

People residing in two Massachusetts counties, namely Worcester and Bristol, can pick one of the four 2021 Medicare Advantage Preferred Provider Organization (PPO) plans provided by this leading health insurer. The facility can be availed of during 2020’s Medicare Advantage and Prescription Drug Plan Annual Election Period or AEP that runs from Oct 15 through Dec 7, 2020. This is applicable for the plan effective Jan 1, 2021.

The MA plans will have $0 to low monthly pay premiums and low co-payments for doctor checkups. The offerings also include coverage of most annual screenings for free, a wide network of physicians and specialists, emergency coverage across the globe, et al.

One such plan is the Humana Honor plan, a $0 premium Medicare Advantage PPO option with a $40 Part B giveback. It is available to people eligible for Medicare as well as  included in VA health care coverage by encompassing health care services at non-VA (civilian) facilities including dental coverage.

Residents of Massachusetts will be able to gain traction from better health plan choices, which in turn, are expected to enhance health outcomes.
This is not the first time that this health insurance giant made efforts to expand its existence and helped people with better MA plan options. Having said that, this seems the perfect time to widen the company’s presence when healthcare is in maximum demand among most communities across the world.

There has been a host of activities that the company took up recently. It tied up with Prime Healthcare to offer in-network access to most area Humana Medicare Advantage and commercial plan members at two Prime Healthcare hospitals in Kansas. It also signed a five-year pact with the state of New York’s leading healthcare provider Northwell Health that will provide a new suite of services and products in the New York metropolitan region.

Humana announced a slew of 2021 Medicare product offerings, such as Medicare Advantage and Prescription Drug Plans, etc. Beneficiaries will now be able to choose from 69 new MAPD plans across various additional counties. It also announced the launch of a Medicare Advantage Health Maintenance Organization (HMO) plan in rural communities of 31 counties across the Knoxville, Memphis, Nashville areas. The extension is part of its Tennessee expansion plan chalked out for next year. The health insurance giant will also provide Humana Honor plan in every county across the Tennessee region, which is available for all individuals eligible for Medicare.

With strong partnerships, this lead insurance giant is well-poised for growth on the back of its Medicare business.

The Future of Medicare Business

With the surge in aging population across the United States, demand for MA plans is going to remain upbeat. The health care provider flaunts a strong Medicare business across the United States where it has been offering at least one Medicare plan across 50 states. Notably, the company has been providing private health plans under the Medicare program for more than three decades now.

In order to offload the pandemic-induced financial burden from its Medicare Advantage members, the company even waived additional costs for in-network primary care, outpatient behavioral health and telehealth visits for the remainder of this year.

The 2020 individual Medicare Advantage membership is now expected to be roughly 375,000 members, higher than the previous forecast of 330,000-360,000 members.

Zacks Rank and Price Performance

Shares of this currently Zacks Rank #4 (Sell) company have surged 35.8% in a year compared with the industry’s growth of 25.8%.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other companies in the same space, such as Centene Corp. (CNC Quick QuoteCNC – Free Report) , Anthem Inc. (ANTM Quick QuoteANTM – Free Report) and Molina Healthcare, Inc. (MOH Quick QuoteMOH – Free Report) have also rallied 24.4%, 18% and 77.5%, respectively, in the same time frame.

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