LOUISVILLE, Ky. (WDRB) — Louisville-based Humana Inc., one of the nation’s largest health insurers, will leave the commercial insurance business over the next two years, meaning the company will no longer cover people through employer-sponsored plans, the company said Thursday.

Commercial coverage accounts for a small portion of Humana’s business, and shedding it further cements the company’s specialty in government-funded programs, such as its cash cow, Medicare Advantage.

“This decision enables Humana to focus resources on our greatest opportunities for growth and where we can deliver industry leading value for our members and customers,” Humana CEO Bruce Broussard said in a news release.

It's unclear how the move will affect Humana's own employment.

"At this time, we do not know the total number of roles that will be eliminated as final decisions surrounding organizational changes, the development of new job opportunities and the wind down of the business are still underway," Humana spokesman Mark Taylor said in an emailed statement Thursday.

More than 10,000 of the company’s 65,000 nationwide employees are based in the Louisville metro area, where Humana maintains its headquarters, the company said last fall.

The move to jettison the business is not surprising.

Commercial insurance has been a diminished focus for years for Humana, which makes most of its money offering Medicare Advantage plans to seniors.

Humana is the second-biggest player in Medicare Advantage and has an increasing presence in Medicaid, the state-based program for the poor. It also covers military personnel through federal contracts.

It hopes to complement the government-backed insurance businesses by building up its own healthcare services segment called CenterWell, which operates primary care clinics and sends healthcare providers to members' homes.

As for Humana’s “sub-scale” commercial business, it could fetch $1.5 billion in a sale, Deutsche Bank analysts wrote in October.

Humana declined to say whether the company plans to sell the business or to simply discontinue it.

“At this time, we have only said we are exiting the business,” Taylor said.

The move follows Humana’s decision in 2017 to stop participating in the individual commercial market covering people through the Obamacare health exchanges.

Humana will now shed its group commercial plans, including employer-sponsored plans; large organizations that self-insure but pay Humana to administer their plans; and plans offered to federal employees.

Humana covered 986,400 people through those businesses in 2022, about 6% of its total medical members. The businesses accounted for about 4% of Humana’s $88.5 billion in premium and services revenue in 2022, according to the company’s 2022 annual report.

Made with Flourish

Biggest impact in Kentucky

Humana’s exit from the market will be felt perhaps most in the company’s own backyard.

Humana has more members in Kentucky — 219,500 as of Dec. 31 — than any of the other 12 states in which it provides commercial group insurance and services to self-insured groups, according to WDRB’s analysis of company figures.

For Louisville-area employers, the big players in health insurance are Anthem Blue Cross-Blue Shield, United Healthcare and Humana, said Ben Byrne, president of Byrne Insurance Group.

As with any business, less competition usually isn’t good news for customers, he said.

“Anytime there are carriers pulling out, it creates uncertainty,” he said.

Byrne’s agency helps about 300 employers, most of whom are based in Kentucky, obtain health coverage annually.

The move is even more unfortunate because Humana is known for helping local employers control their healthcare spending and put a damper on ever-rising costs, Byrne said.

The company’s “Go365” wellness program — which incentivizes employees to get biometric screenings, exercise and eat healthier — saved employers money, he said.

“They have always been on the cutting edge,” he said.

Reach reporter Chris Otts at 502-585-0822, cotts@wdrb.com, on Twitter or on Facebook. Copyright 2023. WDRB Media. All rights reserved.