Health insurance giant Humana, which is based in Louisville, will discontinue its employer-sponsored programs over the next two years.
The company announced the decision to focus mainly on government-funded programs Thursday in a filing with the Securities and Exchange Commission.
The vast majority of the company’s $88.5 billion in insurance revenue came from government contracts last year, Humana said in its annual report. Group and individual Medicare Advantage plans were responsible for nearly 79% of revenue in 2022, while 4% came from commercial group plans.
Humana reported it had more than 986,000 members on commercial group plans last year, or nearly 6% of its total membership. Nearly a third of its members are on group or individual Medicare Advantage plans.
Ben Hendrix, an analyst with RBC Capital Markets, wrote in a memo Thursday that "Humana’s decision to exit its employer business lines over the next 18-24 months comes as little surprise." Hendrix wrote Humana has de-emphasized its commercial group businesses over the "past several years."
In a press release, the company said it determined the employer group insurance program would not be able to “sustainably” meet the needs of commercial members, nor the company’s strategic goals. It plans to end those programs over the next 18 to 24 months.
“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,” Bruce Broussard, Humana’s president and chief executive officer, said in the press release.
Humana is one of Louisville’s top corporate employers, with 12,000 employees locally. The company has not said how these changes may affect its local workforce.
Olivia Sievert with Greater Louisville, Inc., the local chamber of commerce, called Humana's announcement "a strategic decision to position the company for continued growth based on the rapidly changing needs of customers and the market" in a statement. She said the company is committed to the region in terms of employing "thousands" and investing in the community and economy.
This story was updated to include comment from Olivia Sievert.
Jacob Munoz contributed reporting.