Humana Didn’t Exactly Take Obamacare in Stride
Health insurer Humana (NYSE:HUM) – which offers insurance policies on the Affordable Care Act-created marketplaces of 14 states — reported fourth-quarter and full-year financial results on Wednesday. The company lost $30 million, or 19 cents per share, in the final three months of the year, a drop from the $192 million, or $1.19 per share, it earned a year ago.
Largely responsible for that turn to negativity was a $243 million expense Humana incurred for setting aside funds to support a group of long-term care policies that it no longer sells. But that charge was no surprise: No new policies in that block have been sold since 2005, but current policyholder costs rose thanks to greater longevity and increased use of in-home health care, forcing Humana to boost reserves.
What the insurer did not anticipate were the changes to Obamacare made by the Department of Health and Human Services at the end of last year and the glitch-riddled rollout of the insurance exchanges created by the health care reform law.
CEO Bruce Broussard told analysts on a conference call following the release of the health insurer’s fourth-quarter results that problems with the implementation of the Affordable Care Act that caused the administration of President Barack Obama to backpedal and apologize are resulting in different exchange enrollment figures from what the insurer had anticipated and therefore impacted earnings.