Humana Inc. and its subsidiaries (Humana) operates as an insurance service provider.
Through the company’s Humana insurance services, and its CenterWell health care services, the company makes it easier for the millions of people it serves to achieve their best health – delivering the care and service they need, when they need it. These efforts are leading to a better quality of life for people with Medicare, Medicaid, families, individuals, military service personnel, and communities.
As of D...
Humana Inc. and its subsidiaries (Humana) operates as an insurance service provider.
Through the company’s Humana insurance services, and its CenterWell health care services, the company makes it easier for the millions of people it serves to achieve their best health – delivering the care and service they need, when they need it. These efforts are leading to a better quality of life for people with Medicare, Medicaid, families, individuals, military service personnel, and communities.
As of December 31, 2024, the company had approximately 16 million members in its medical benefit plans, as well as approximately 5 million members in its specialty products. During 2024, 85% of the company's total premiums and services revenue were derived from contracts with the federal government, including 14% derived from its individual Medicare Advantage contracts in Florida with the Centers for Medicare and Medicaid Services, or CMS, under which it provides health insurance coverage to approximately 924,800 members as of December 31, 2024.
Business Segments
The company's two reportable segments, Insurance and CenterWell, are based on a combination of the type of health plan customer and adjacent businesses centered on well-being solutions for its health plans and other customers.
Products
The company's medical and specialty insurance products allow members to access health care services primarily through its networks of health care providers with whom it has contracted. Health maintenance organizations, or HMOs, include comprehensive managed care benefits generally through a participating network of physicians, hospitals, and other providers. Preferred provider organizations, or PPOs, provide members the freedom to choose any health care provider. However, PPOs generally require the member to pay a greater portion of the provider’s fee in the event the member chooses. Point of Service, or POS, plans combine the advantages of HMO plans with the flexibility of PPO plans. In general, POS plans allow members to choose, at the time medical services are needed, to seek care from a provider within the plan’s network or outside the network. In addition, the company offers services to its health plan members, as well as to third parties, that promote health and wellness, including pharmacy solutions, primary care, and home solutions, as well as services and capabilities to advance population health. At the core of the company's strategy is its integrated care delivery model, which unites quality care, high member engagement, and sophisticated data analytics. Three core elements of the model are to improve the consumer experience by simplifying the interaction with the company, engaging members in clinical programs, and offering assistance to providers in transitioning from a fee-for-service, or FFS, to a value-based arrangement. The company's approach to primary, physician-directed care for its members aims to provide quality care that is consistent, integrated, cost-effective, and member-focused. The model is designed to improve health outcomes and affordability for individuals and for the health system as a whole, while offering its members a simple, seamless healthcare experience. The discussion that follows describes the products offered by each of the company's segments.
Insurance Segment Products
The Insurance segment comprises insurance products serving Medicare and state-based contract beneficiaries, as well as individuals and employers. The segment also includes its Pharmacy Benefit Manager, or PBM, business. These products are described in the discussion that follows.
Medicare
The company has participated in the Medicare program for private health plans for over 30 years and has established a national presence, offering at least one type of Medicare plan in all states. The company employs 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.
Medicare is a federal program that provides persons aged 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. 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. The company’s Medicare Advantage, or MA, plans are discussed in the following sections. Prescription drug benefits are provided under Part D.
Individual Medicare Advantage Products
The company contracts 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, Private Fee-For-Service, or PFFS, and Special Needs Plans, including Dual Eligible Special Needs, or D-SNP, 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 members in their health care decisions, care management programs, wellness and prevention programs, and, in some instances, a reduced monthly Part B premium. Most Medicare Advantage plans offer the prescription drug benefit under Part D as part of the basic plan, subject to cost sharing and other limitations. Accordingly, all of the provisions of the Medicare Part D program described in connection with the company's stand-alone prescription drug plans in the following section are also applicable to most of the company's Medicare Advantage plans. Generally, Medicare-eligible individuals enroll in one of the company's plan choices between October 15 and December 7 for coverage that begins on the following January 1.
The company’s Medicare HMO and PPO plans, which cover Medicare-eligible individuals residing in certain counties. PPO plans carry an out-of-network benefit that is subject to higher member cost-sharing. In some cases, these beneficiaries are required to pay a monthly premium to the HMO or PPO plan in addition to the monthly Part B premium they are required to pay the Medicare program.
Most of the company’s Medicare PFFS plans are network-based products with in- and out-of-network benefits due to a requirement that Medicare Advantage organizations establish adequate provider networks, except in geographic areas that CMS determines have fewer than two network-based Medicare Advantage plans. Individuals in these plans pay the company a monthly premium to receive typical Medicare Advantage benefits along with the freedom to choose any health care provider that accepts individuals at rates equivalent to Medicare FFS payment rates.
The company generally relies on providers, including certain providers in its network who are its employees, to code their claim submissions with appropriate diagnoses, which it sends to CMS as the basis for its health status-adjusted payment received from CMS under the actuarial risk-adjustment model. It also relies on these providers to document appropriately all medical data, including the diagnosis data submitted with claims. In addition, the company conducts medical record reviews as part of its data and payment accuracy compliance efforts, to more accurately reflect diagnosis conditions under the risk adjustment model.
As of December 31, 2024, the company provided health insurance coverage under CMS contracts to approximately 5,661,800 individual Medicare Advantage members, including approximately 924,800 members in Florida.
The company’s individual Medicare Advantage products covered under Medicare Advantage contracts with CMS are renewed generally for a calendar year term unless CMS notifies it of its decision not to renew by May 1 of the calendar year in which the contract would end, or the company notifies CMS of its 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 its Medicare Advantage products have been renewed for 2025, and all of the company’s product offerings filed with CMS for 2025 have been approved.
Individual Medicare Stand-Alone Prescription Drug Products
The company offers stand-alone prescription drug plans, or PDPs, under Medicare Part D, including a PDP offering co-branded with Walmart Inc., or the Humana-Walmart plan. Generally, Medicare-eligible individuals enroll in one of the company’s plan choices between October 15 and December 7 for coverage that begins on the following January 1. The company’s 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. The company’s revenues from CMS and the beneficiary are determined from its PDP bids submitted annually to CMS. The company’s stand-alone PDP contracts with CMS are renewed generally for a calendar year term unless CMS notifies it of its decision not to renew by May 1 of the calendar year in which the contract would end, or the company notifies CMS of its 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 its Medicare stand-alone PDP products have been renewed for 2025, and all of the company’s product offerings filed with CMS for 2025 have been approved.
The company has administered CMS’s Limited Income Newly Eligible Transition, or LI-NET, prescription drug plan program since 2010. This program allows individuals who receive Medicare’s low-income subsidy to also receive immediate prescription drug coverage at the point of sale. CMS temporarily enrolls newly identified individuals with both Medicare and Medicaid into the LI-NET prescription drug plan program, and subsequently transitions each member into a Medicare Part D plan.
Group Medicare Advantage and Medicare Stand-Alone PDP
The company offers products that enable employers that provide post-retirement health care benefits to replace Medicare wrap or Medicare supplement products with Medicare Advantage or stand-alone PDPs from Humana. These products are primarily offered as PPO plans on the same Medicare platform as individual Medicare Advantage plans. These plans offer the same types of benefits and services available to members in the company’s individual Medicare plans discussed previously, however, group Medicare Advantage plans typically have richer benefit offerings than individual Medicare Advantage plans, including prescription drug coverage in the gap, for instance, due to the desire of many customers to closely match their pre-retirement benefit structure.
Medicare Supplement
The company also offers Medicare supplement products that help pay the medical expenses that Medicare FFS does not cover, such as copayments, coinsurance, and deductibles.
State-based Contracts
Through its state-based contracts, the company serves members enrolled in Medicaid, a program funded by both the federal and state governments and administered by states to care for their most vulnerable populations. Within federal guidelines, states determine whom to cover, but general categories for traditional Medicaid programs include children and parents, Aged, Blind, and Disabled (ABD) individuals, and Medicaid Expansion adults. Through Medicaid Managed Long-Term Support Services (MLTSS) programs, states offer programs to deliver support services to people who receive home and community or institution-based services for long-term care.
The company has contracts in multiple states to serve Medicaid-eligible members, including Florida, Kentucky, Illinois, Indiana, Louisiana, Ohio, Oklahoma, South Carolina, and Wisconsin.
The company also serves members who qualify for both Medicaid and Medicare, referred to as "dual eligible," through its Medicaid, Medicare Advantage, and stand-alone prescription drug plans. As the dual eligible population represents a disproportionate share of costs, Humana is participating in varied integration models designed to improve health outcomes and reduce avoidable costs.
As part of its individual Medicare Advantage products, the company also offers Dual-Eligible Special Needs Plans (D-SNP). In connection with offering a D-SNP in a particular state, the company is required to enter into a special coordinating contract with the applicable state Medicaid agency. To meet federal requirements that took effect in 2021, states have implemented new D-SNP requirements to strengthen Medicaid-Medicare integration requirements for D-SNPs. Some states are also moving to support the dual eligible population by linking D-SNP participation to enrollment in a plan that also participates in a state-based Medicaid program to coordinate and integrate both Medicare and Medicaid benefits.
Specialty
The company sells specialty and ancillary insurance benefits consisting of dental, vision, life, and disability to employer groups. In addition, it sells dental and vision specialty insurance benefits to individuals.
Commercial Fully-Insured and ASO
In February 2023, the company announced its planned exit from the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded, and Federal Employee Health Benefit medical plans, as well as associated wellness and rewards programs. Following a strategic review, the company determined the Employer Group Commercial Medical Products business was no longer positioned to sustainably meet the needs of commercial members over the long term or support its long-term strategic plans.
For in-force group commercial medical customers and members, the company’s commercial products included a broad spectrum of major medical benefits with multiple in-network coinsurance levels and annual deductible choices that employers of all sizes offered to their employees on either a fully-insured, through HMO, PPO, or POS plans, or self-funded basis. The company’s plans integrated clinical programs, plan designs, communication tools, and spending accounts.
The company’s ASO products were offered to small group and large group employers who self-insured their employee health plans. It received fees to provide administrative services, which generally included the processing of claims, offering access to its provider networks and clinical programs, and responding to customer service inquiries from members of self-funded employers. These products might have included all of the same benefit and product design characteristics of the company’s fully-insured HMO, PPO, or POS products described previously. Under ASO contracts, self-funded employers generally retained the risk of financing the costs of health benefits, with group customers retaining a greater share and small group customers a smaller share of the cost of health benefits. All small group ASO customers and many group ASO customers purchased stop-loss insurance coverage from the company to cover catastrophic claims or to limit aggregate annual costs.
Military Services
Under its TRICARE contracts with the United States Department of Defense, or DoD, the company provides administrative services to arrange health care services for active-duty and retired military personnel and their dependents. It has participated in the TRICARE program since 1996 under contracts with the DoD. Under its contracts, the company provides administrative services while the federal government retains all of the risk of the cost of health benefits. Accordingly, the company accounts for revenues under the current contract net of estimated health care costs similar to an administrative services fee-only agreement.
The company delivered services under the T2017 East Region contract from commencement on January 1, 2018, through expiration on December 31, 2024. The T2017 East Region contract comprises multiple states and approximately 6 million TRICARE beneficiaries. In December 2022, the company was awarded the next generation of TRICARE Managed Care Support Contracts, or T-5, for the updated TRICARE East Region by the Defense Health Agency of the DoD. The T-5 East Region contract commenced on January 1, 2025, and comprises various states, and Washington D.C., and approximately 4.6 million beneficiaries. The transition period for the T-5 contract began in January 2024 and overlapped the final year of the T2017 contract. The length of the contract is one transition year followed by eight annual option periods.
The company’s CenterWell Segment Products
The products offered by the company’s CenterWell segment are key to its integrated care delivery model. This segment includes its pharmacy solutions, primary care, and home solutions operations. The CenterWell segment also includes its strategic partnerships with Welsh, Carson, Anderson & Stowe, or WCAS, to develop and operate senior-focused, payor-agnostic, primary care centers, as well as its minority ownership interest in hospice operations. Services offered by this segment are designed to enhance the overall healthcare experience.
Pharmacy Solutions
The company’s pharmacy solutions business includes the operations of CenterWell Pharmacy (its mail-order pharmacy business), CenterWell Specialty Pharmacy, and other retail pharmacies located within CenterWell Primary Care clinics for brand, generic, specialty drugs, over-the-counter medications and supplies, as well as hospice pharmacy drugs.
Primary Care
The company operates full-service, value-based senior-focused primary care centers in a number of states, including Georgia, Florida, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia, staffed by primary care providers and medical specialists with a primary focus on the senior population under its Primary Care Organization, or PCO. PCO operates these clinics primarily under the Conviva Senior Primary Care and CenterWell Senior Primary Care brands. The company’s primary care subsidiaries operate its medical center business through both employed physicians and care providers, and through third-party management service organizations with whom it contracts to arrange for and manage certain clinical services. PCO currently operates 344 primary care clinics and employs approximately 1,000 primary care providers. PCO serves approximately 390,500 patients, primarily under risk-sharing arrangements with Humana Medicare Advantage health plans, third-party Medicare Advantage health plans, and CMS-administered risk-sharing arrangements for Original Medicare.
PCO also operates a Medical Services Organization, or MSO, through Conviva and CenterWell that coordinates medical care for Medicare Advantage beneficiaries across multiple states. This MSO provides resources in care coordination, financial risk management, clinical integration, and patient engagement that help physicians improve the patient experience, as well as care outcomes. PCO’s MSO collaborates with physicians, medical groups, and integrated delivery systems to successfully transition to value-based care by engaging, partnering, and offering practical services and solutions.
In 2020, the company's Primary Care Organization entered into a strategic partnership with Welsh, Carson, Anderson & Stowe, or WCAS, to accelerate the expansion of its primary care model. In May 2022, the company established a second strategic partnership with WCAS to develop additional centers between 2023 and 2025. As of December 31, 2024, there were 133 primary care clinics operating under the partnership, and the company has the capacity to open or acquire up to approximately 20 additional centers through the existing partnership agreements.
Home Solutions
CenterWell Home Health
The company operates CenterWell Home Health through which it is actively involved in the care management of its customers with the greatest needs via in-home care. CenterWell Home Health has locations in various states, providing extensive geographic coverage with approximately 65% overlap with its individual Medicare Advantage membership. The company's home solutions geographic scale and clinical breadth provide the opportunity to offer care beyond its health plan members. Through the integration of these home health operations, the company is focused on accelerating clinical innovation and the development and rollout of a value-based operating model at scale, more closely aligning incentives to focus on improving patient outcomes and reducing the total cost of care. This is critical to deploying a value-based, advanced home health model at scale that makes it easier for patients and providers to benefit from the company's full continuum of home-based capabilities, leveraging the best channel to deliver the right care needed at the right time.
OneHome
OneHome serves as the convener for the value-based model meeting the needs of health plans by serving their members through a full-risk model for integrated home-based services. OneHome manages a full range of post-acute patient needs, integrating and coordinating with physicians, hospitals, and health plans for the provision of home health and infusion services, as well as the distribution of durable medical equipment, or DME, at patients’ homes.
Hospice
On August 11, 2022, the company completed the sale of a 60% interest in Gentiva (formerly Kindred) Hospice, to Clayton, Dubilier & Rice, or CD&R. Upon closing, Gentiva Hospice was restructured into a new stand-alone company. The company continues to own approximately 35% minority ownership in Gentiva Hospice operations.
Provider Arrangements
The company provides its members with access to health care services through its networks of health care providers whom it employs or with whom it has contracted, including hospitals and other independent facilities, such as outpatient surgery centers, primary care providers, specialist physicians, dentists, and providers of ancillary health care services and facilities. These ancillary services and facilities include laboratories, ambulance services, medical equipment services, home health agencies, mental health providers, rehabilitation facilities, nursing homes, optical services, and pharmacies. The company's membership base and the ability to influence where its members seek care generally enable it to obtain contractual discounts with providers.
The company uses a variety of techniques to provide access to effective and efficient use of health care services for its members. These techniques include the coordination of care for its members, product and benefit designs, hospital inpatient management systems, the use of sophisticated analytics, and enrolling members into various care management programs. The focal point for health care services in many of the company's HMO networks is the primary care provider who, under contract with the company, and provides services to its members. The company has available care management programs related to complex chronic conditions, such as congestive heart failure and coronary artery disease. It also has programs for prenatal and premature infant care, asthma-related illness, end-stage renal disease, diabetes, cancer, and certain other conditions.
The company typically contracts with hospitals on either a per diem rate, which is an all-inclusive rate per day, a case rate for diagnosis-related groups (DRG), which is an all-inclusive rate per admission, or a discounted charge for inpatient hospital services. Outpatient hospital services generally are contracted at a flat rate by type of service, ambulatory payment classifications, or APCs, or at a discounted charge. Outpatient surgery centers and other ancillary providers typically are contracted at flat rates per service provided or are reimbursed based upon a nationally recognized fee schedule, such as the Medicare allowable fee schedule.
The company's contracts with physicians typically are renewed automatically each year, unless either party gives written notice, generally ranging from 90 to 120 days, to the other party of its intent to terminate the arrangement. Most of the physicians in the company’s PPO networks and some of its physicians in its HMO networks are reimbursed based upon a fixed fee schedule, which typically provides for reimbursement based upon a percentage of the standard Medicare allowable fee schedule.
A significant portion of the company's Medicare network contracts, including those with both hospitals and physicians, are tied to Medicare reimbursement levels and methodologies.
Capitation
The company offers providers a continuum of opportunities to increase the integration of care and offers assistance to providers in transitioning from a fee-for-service to a value-based arrangement. These include performance bonuses, shared savings, and shared risk relationships. For some of the company's medical membership, it shares risk with providers under capitation contracts where physicians and hospitals accept varying levels of financial risk for a defined set of membership. Under the typical capitation arrangement, the company prepays these providers a monthly fixed fee per member, known as a capitation (per capita) payment, to cover all or a defined portion of the benefits provided to the capitated member.
As of December 31, 2024, approximately 2,361,500 members, or 14.4%, of the company's medical membership, were covered under shared risk value-based arrangements, which provide all member benefits, including 2,114,900 individual Medicare Advantage members, or 38.0%, of the company's total individual Medicare Advantage membership.
Physicians under capitation arrangements typically have stop-loss coverage so that a physician’s financial risk for any single member is limited to a maximum amount on an annual basis. The company typically processes all claims and measures the financial performance of its capitated providers and requires guarantees in certain instances. However, it delegated claim processing functions under capitation arrangements covering approximately 304,400 members, including 303,500 individual Medicare Advantage members, or 14.4%, of the 2,114,900 individual Medicare Advantage members covered under shared risk value-based contracts at December 31, 2024, with the provider assuming substantially all the risk of coordinating the members’ health care benefits. Capitation expense under delegated arrangements for which the company has a limited view of the underlying claims experience was approximately 3.6% of total benefits expense for the year ended December 31, 2024. The company remains financially responsible for health care services to its members in the event its providers fail to provide such services.
Accreditation Assessment
The company's accreditation assessment program consists of several internal programs, including those that credential providers and those designed to meet the audit standards of federal and state agencies, as well as external accreditation standards. The company also offers quality and outcome measurement and improvement programs, such as the Health Care Effectiveness Data and Information Set, or HEDIS, which is used by employers, government purchasers, and the National Committee for Quality Assurance (NCQA) to evaluate health plans based on various criteria, including effectiveness of care and member satisfaction.
Providers participating in the company's networks must satisfy specific criteria, including licensing, patient access, office standards, after-hours coverage, and other factors. Most participating hospitals also meet accreditation criteria established by CMS and/or The Joint Commission.
Recredentialing of participating providers occurs every three years, unless otherwise required by state or federal regulations. Recredentialing of participating providers includes verification of their medical licenses, review of their malpractice liability claims histories, review of their board certifications. A committee composed of a peer group of providers reviews the applications of providers being considered for credentialing and recredentialing.
The company maintains accreditation for certain of its health plans and/or departments from NCQA, the Accreditation Association for Ambulatory Health Care (AAAHC), and/or URAC.
NCQA reviews the company's compliance based on standards for quality improvement, population health management, credentialing, utilization management, network management, and member experience. The company has achieved and maintained NCQA health plan accreditation in many of its Medicare and Medicaid markets. Humana’s pharmacy organization is accredited by URAC.
Sales and Marketing
The company uses various methods to market its products, including television, radio, the Internet, telemarketing, wholesale distributors (general agencies), and direct mailings.
The company has a marketing arrangement with Walmart Inc., or Walmart, for its individual Medicare stand-alone PDP offering. It also sells group Medicare Advantage products through employers. In addition, the company markets its Medicare and individual specialty products through licensed independent brokers and agents. For its Medicare products, commissions paid to employed sales representatives and independent brokers and agents are based on a per unit commission structure, regulated in structure and amount by CMS. For its individual specialty products, the company generally pays brokers a commission based on premiums, with commissions varying by market and premium volume. In addition to a commission based directly on premium volume for sales to particular customers, the company also has programs that pay brokers and agents based on other metrics. These include commission bonuses based on sales that attain certain levels or involve particular products. The company also pays additional commissions based on aggregate volumes of sales involving multiple customers.
In its Insurance segment, the company markets its specialty products to individuals through their employers or other groups, which typically offer employees or members a selection of specialty products, pay for all or part of the premiums, and make payroll deductions for any premiums payable by the employees. The company uses licensed independent brokers, independent agents, digital insurance agencies, and employees to sell its specialty products. It pays brokers and agents using the same commission for its specialty products.
Certain Other Services
Captive Insurance Company
The company bears general business risks associated with operating its business, such as professional and general liability, employee workers’ compensation, cybersecurity, and officer and director errors and omissions risks. The company retains certain of these risks through its wholly-owned, captive insurance subsidiary. It reduces exposure to these risks by insuring levels of coverage for losses in excess of its retained limits with a number of third-party insurance companies. The company remains liable in the event these insurance companies are unable to pay their portion of the losses.
Centralized Intercompany Services
The company provides centralized intercompany services to each of its health plans and to its business segments from its headquarters and service centers. These services include management information systems, product development and administration, finance, human resources, accounting, law, public relations, marketing, insurance, purchasing, risk management, internal audit, actuarial, underwriting, claims processing, billing/enrollment, and customer service. Through intercompany service agreements approved by state regulatory authorities, Humana Inc., the company’s parent company, charges a services fee for reimbursement of certain centralized services provided to its subsidiaries to the extent that Humana Inc. is the service provider.
History
The company was founded in 1961. The company was incorporated as a Delaware corporation in 1964. The company was formerly known as Extendicare Inc. and changed its name to Humana Inc. in April 1974.
