Most of the their business is focused around Medicare Advantage, which is going like “gangbusters” as more and more baby boomers qualify for Medicare.
Unsurprising. There’s a lot Medicare doesn’t cover.
Humana also brought in $118M in profit from ACA plans — which they have decided to depart the individual ACA insurance market.
Again, unsurprising. The 118M is about 10% of total quarterly profits, and with the ACA still highly uncertain, it makes sense to get on the sidelines for awhile and see what happens with it.
Please don’t tell me that insurers aren’t making out like bandits and can’t do more to rein costs.
I will never tell you that any company can never do more to rein in costs. What I am telling you is that the insurers run pretty skinny organizations and make relatively low profits considering the size of their revenues. Last time I checked, there were something like 55 business sectors that were more profitable than health insurers. I am also telling you that they are extremely good at rooting out fraud, which is something that the government is extremely bad at.
I don’t know what “making out like bandits” means, since it has no accounting definition. :-)
Ever since they became “for profit” entities, premiums, deductibles, and copays have spiraled upward, as have executive pay and administrative costs. There is no reason why things are as expensive as they are and there is no transparency in the healthcare industry.
Well, there’s a lot of reasons why things are as expensive as they are, as I just posted a few moments ago. Transparency is indeed a problem, especially in the hospital sector, where billing and costing methods are not GAAP and are arcane at best, often akin to the Pentagon paying $600 for a hammer.
Executive pay and admin costs are not at all unusual for companies of that size, however. The Humana CEO made 1.2M in cash salary and another 2M in in cash or value incentives; like most of these guys, the bulk of their compensation is paid in stock awards (in his case, another 16M) but that gets paid for by the shareholders, not the employees or the insured.