Humana: Obamacare Exchange Enrollment 'More Adverse Than Previously Expected'

On January 9, health insurance bellwether Humana formally announced something that industry observers have long suspected: that healthy and young people don’t think Obamacare’s insurance plans are a good deal for them. Those people, Humana indicated, are choosing to stay on their previous health plans, where allowed, instead of participating in the Obamacare exchanges. As a result, Humana “now expects the risk mix of members enrolling through the health insurance exchanges to be more adverse than previously expected.” The question now is: will taxpayers have to pick up the bill for the Obama administration’s last-minute changes to the law?

Losses on exchanges cushioned by outperformance elsewhere

Humana’s answer to this question, thus far, appears to be: not yet. The insurer “is evaluating the effects” of President Obama’s chaotic decision to allow some insurers in some states to continue old plans, and exempt some Americans from the individual mandate. But for now, Humana is “reaffirming its previous 2014 earnings guidance of $7.25 to $7.75 per diluted common share.” But that’s because Humana’s losses on the exchanges are being offset by good performance in the company’s other businesses.