Humana strengthened by exit from ACA after suffering $45 million operating loss

Humana's Medicare Advantage and Part D businesses are well positioned for the aging baby boomer demographic and members who have chronic conditions, President and CEO Bruce Broussard said during the company's annual shareholders' call on Thursday.

The past four or five years have been an amazing run in revenue and membership, Broussard said at the company's headquarters in Louisville, Kentucky.

This is despite an operating loss of $45 million in February due to its Affordable Care Act business, of which Humana said it would no longer be a participant starting in 2018.

[Also: S&P lowers Humana ratings, raises Aetna's, after breakup]

It also follows a failed attempt to merge with Aetna after a federal court ruled against the $37 billion deal. Humana was positioned to get a $1 billion breakup fee, or $630 million net tax, from Aetna.

During that acquisition period for 21 months, Humana was able to withstand that test of time by keeping to its goals, Broussard said Thursday.

This includes Humana's Bold Goal started three years ago to improve the health of its communities by 20 percent by 2020.  The number of unhealthy days has already been reduced by 3.1 percent, Broussard said.

[Also: Aetna to pay $1 billion breakup fee to walk away from Humana merger]

"As we think about our strategy going forward it really wraps around one simple concept, that's quality membership growth," Broussard said.

The demographics of the industry are favorable and the societal problem around chronic conditions presents a great opportunity for the organization, he said.

Humana's strategy will focus on three areas, including its relationship with providers and changing it from one of treatment to one of health. The second is managing chronic conditions by integrating members' health to home health, behavioral health and pharmaceutical distribution. And thirdly by taking the complexity out of healthcare to make it simpler for people to engage in their health.

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During questions, Justin Danhof, attorney and director for the Free Enterprise Project of the National Center for Public Policy Research, asked Broussard about Humana leaving the ACA, saying it was incumbent on the company to be part of the solution.

Broussard said the company can best focus on improving the health of its senior population.

Danhof later said in a release that he was disappointed by Broussard's answer that he said all but gave up the insurer's seat at the negotiating table to a repeal and replace the ACA.

Republicans next week are expected to present a new or amended plan to House Speaker Paul Ryan's American Health Care Act.

Humana on Thursday declared a cash dividend to stockholders of $.40 per share payable on July 31, 2017.  

Twitter: @SusanJMorse