JPM 2022: Humana execs try to soothe skittish investors as new MA enrollment projections disappoint

Humana executives sought to ease investor concerns about a filing last week that significantly slashed its membership growth outlook in Medicare Advantage.

CEO Bruce Broussard said during the J.P. Morgan Healthcare Conference on Monday afternoon that the company is working to develop new strategies to retain members in the long term but that Humana remains confident in its ability to drive long-term earnings growth despite the disappointing numbers coming out of Medicare open enrollment.

The company, he said, is also continuing to focus on areas like its clinical services to drive growth amid the membership declines.

"We continue to see that it's serving us well," Broussard said.

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The insurer issued a filing with the Securities and Exchange Commission on Thursday that decreased its outlook for MA enrollment from between 325,000 and 375,000 new members to between 150,000 and 200,000 new members. 

Humana added 130,000 members during the annual enrollment period for MA last fall. It said in the filing that it saw higher than expected terminations during the enrollment window and expects an elevated number of terminations through 2022.

The insurer's stock tumbled late last week as a result. Broussard said much of the churn is among members who were only enrolled in Humana plans for one year, which did not allow enough time for them to fully reap the benefits of the company's suite of additional services.

Chief Financial Officer Susan Diamond said during the session that the company is awaiting final enrollment numbers from the Centers for Medicare & Medicaid Services, which are expected this month, and then it will mull areas of investment to reorient its growth trajectory.

She said Humana took a conservative approach to its 2022 plans, building in the impacts of the COVID-19 pandemic. But the AEP projections are coming in short of their conservative estimates, she said.

"Now that we've had the benefit of seeing AEP results, we will certainly need to evaluate overall investment," Diamond said.

Broussard said Humana does much of its MA enrollment outreach telephonically, and its sales approach still focuses largely on price rather than articulating the broader value of a plan design or the MA program as a whole.

He said evolving to sell beyond price is going to be critical not just for Humana but for competitors as well.

"The total value of Medicare is something that really differentiates not only MA but differentiates a plan," he said.