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Humana (HUM) Grows on Strong Medicare Business Expansion

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Humana Inc. (HUM - Free Report) is well-poised for growth on the back of its robust Medicare business. The company has been constantly taking up initiatives to boost this line of business, which bodes well for the long term.

Impressive uptick in the Medicare Advantage business is owing to its operating initiatives, evident from the 54% surge in Medicare membership from 2013 to 2018. Higher enrollment and a better offering led to this outperformance.

Demand for this business line is expected to bump up, riding on complex patient populations who are constantly looking for value-based care.

For 2019, Individual Medicare Advantage membership is predicted to be around 530000, above the previous projection of 415,000-440,000.

The company has been making concerted efforts to boost its network of Medicare Advantage members. Recently, it announced the upgrade of health plan choices for its Medicare beneficiaries in New Jersey by adding numerous counties to its network.

Last month, it entered into a partnership with Hawaii Senior Medical Group to provide coordinated and enriched experience for Medicare Advantage members in Hawaii. Several strategic alliances have been made by the company of late in order to enhance this business line.

Humana has also been chosen as one of the health plans to provide Florida’s Medicare retirees with Medicare coverage effective Jan 1, 2020. The company recently announced the launch of Humana Honor Medicare Advantage plans for 2020, designed to complement the Veterans Affairs program.

Earlier, management stated that it plans to add 270,000-330,000 members to its Medicare Advantage plans for individuals in 2020. As of Sep 30, 2019, the company had more than 2.3 million individual Medicare Advantage members.

Other companies in the same space like Anthem, Inc. has also been working on its Medicare Advantage network. Also, Centene Corporation (CNC - Free Report) is on course to acquire WellCare Health Plans, Inc. , which is expected to close by the first half of 2020. This combined entity will have a wider scale and diversification with more than 12 million Medicaid and nearly 5 million Medicare members.

Shares of this Zacks Rank #3 (Hold) company have surged 30.9%, outperforming its industry's rally of 20.5%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.



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