HUM - Humana decides to exit Employer Group Commercial Medical Products business

Humana ( NYSE: HUM ) said will exit the Employer Group Commercial Medical Products business, which includes all fully insured, self-funded and Federal Employee Health Benefit medical plans, and linked wellness and rewards programs.

The company noted that no other health plan offerings are materially affected.

Humana said that after a strategic review, it was decided that the Employer Group Commercial Medical Products business could no longer sustainably meet the needs of commercial members over the long term or support the company's long-term strategic plans.

The exit of this business will be phased over the next 18 to 24 months and the company aims to to ensure a smooth transition of services for members and commercial customers.

"It is in line with the company’s strategy to focus our health plan offerings primarily on Government-funded programs (Medicare, Medicaid and Military) and Specialty businesses, while advancing our leadership position in integrated value-based care and expanding our CenterWell healthcare services capabilities," said Humana's President and CEO Bruce Broussard.

Humana said that financial results of the business line  will be adjusted for non-GAAP purposes going ahead and are not expected to impact company's full year 2023 Adjusted EPS outlook.

However, the company now expects Q1 2023 earnings to represent about 33% of full-year 2023 Adjusted EPS, after considering the non-GAAP treatment of the business line, compare to the previous estimate of about 35%.

It is also expected to increase Q1 2023 Insurance segment benefit ratio by about 30 basis points, with no impact expected on the full-year 2023 Insurance segment benefit ratio.

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