Is Health Insurance Good Business?

US health insurance can be very good business, especially if you look at medical giant Humana. They topped their earnings estimate in the first quarter of 2009, during a year when many individuals and small businesses are struggling to keep their coverage in place. Of course, commercial health insurance did not contribute the most to the earnings spike.

Medicare Health Plans Drove Most Profits

Membership in Humana’s Medicare Advantage and Medicare Part D (Prescription) plans went up, and that brought in more revenue.

Medicare Advantage (MA) plans are federally subsidized health plan choices for Medicare beneficiaries. Medicare Part D plans cover prescriptions, and they are also tax dollar subsidized. An enrollee may pay a modest premium to join an MA or Part D plan, and they must also be enrolled in Medicare Part A and B.

Greater Business Efficiency Also Helped

In addition to increased enrollment, Human also credits better oversight management with helping them to save money and increase profit. They have said that they have eliminated duplicate or invalid claims payments, and these result in less claim money being paid out, which of course, increases profits.

Commercial Health Insurance Held On

While Medicare Advantage enrollment jumped 16% in the first quarter, commercial plan enrollment rose 1%. Commercial plans are those plans sold on the individual or group health insurance market that are not subsidized by any tax program like Medicare or Medicaid.
This sounds dismal, but many other insurers saw a drop in enrollments as the recession caused many people to lose their major medical coverage. Indeed, Humana’s executives expect to have a decline in commercial enrollments by the end of the year. They admitted that small businesses were having a tougher time holding onto their coverage than had been originally anticipated.

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