Humana executives said Wednesday that the impacts of COVID-19 represent a $600 million headwind on the company's finances this year.
While the insurer expects those costs to largely be offset by a number of positives, such as better-than-expected specialty and Medicaid performance and the closure of its acquisition of Kindred at Home, there's still plenty of uncertainty around the pandemic, leaders told investors on the company's second-quarter earnings call.
For example, there are still uncertainties about care utilization moving forward, CEO Bruce Broussard said on the call. While care use has bounced back significantly from the pandemic lows, where it will land by the end of the year is still murky, he said.
In addition, the spread of the delta variant of COVID-19 has driven up virus-related hospitalizations in recent weeks, a trend the insurer is watching closely, he said.
Centene CEO Michael Neidorff made similar comments on the company's second-quarter earnings call Tuesday morning, saying the rest of the year could be "choppy" if delta infections continue to rise.
Humana Chief Financial Officer Susan Diamond said on the call that the insurer does not expect similar pandemic-related headwinds to carry into 2022, but is planning for them in the 2021 guidance.
"While we continue to navigate these pandemic-related uncertainties in 2021 … we expect 2022 to be a more normal year," Broussard said.
Humana brought in $588 million in profit for the second quarter of 2021, down 67.8% from its haul in the prior-year quarter.
This echoes its peers' quarterly performance. Insurers posted sky-high profits in the second quarter of 2020 as healthcare utilization plummeted under the pandemic, raking in so much cash that Congress began a probe of their finances.
In the second quarter of 2020, Humana earned $1.8 billion in profit. While this quarter's results represent a steep drop-off year over year, they did surpass Wall Street's expectations, according to Zacks Investment Research.
Revenues were up year over year, according to the earnings report, reaching $20.6 billion. This also beat the Street, according to Zacks.
Profit is also down through June 30 compared to the first half of 2020, according to the report. Through the first two quarters of this year, Humana earned $1.4 billion in profit, compared to 2.3 billion in the first half of 2020.
Revenue increased 8.7% year over year, however. Through the first half of this year, Humana has brought in $41.3 billion in revenue compared to $38 billion in the first half of 2020.
"This year, we continue to focus on delivering strong operating performance, while navigating a dynamic environment due to the ongoing COVID-19 pandemic, all while staying true to our commitment to delivering the highest quality healthcare experience for our members and patients," Broussard said in a statement.
Humana's membership also saw a bump compared to the second quarter of 2020, the insurer said. As of June 30, total medical membership stood at 17 million, representing an increase of 254,000 from the prior-year quarter.
As a result of the performance, Humana said it would boost its guidance for the year to between $24.97 and $25.47. It also raised its revenue guidance to between $82.5 billion and $83.5 billion.