Humana Earnings Call Cheat Sheet: Medicate Enrollment Guidance

On Monday, Humana Inc. (NYSE:HUM) reported its fourth quarter earnings and discussed the following topics in its earnings conference call. Take a look.

Medicare Advantage

Joshua Raskin – Barclays Capital asked: Taking a step back on the Medicare Advantage landscape, we’ve seen some pretty strong growth recently. We’re up to almost 13.5 million lives now.

Historically, you’ve talked about competing with the government, the fee-for-service market and this 15 Percent Solution. Are we getting to the point where competitors are starting to matter? Are there specific markets, besides South Florida, that are popping up/becoming a little bit more difficult from a competitive standpoint?

Michael B. McCallister – Chairman and CEO responded: Not really. Our key to success has been to go nationwide as fast as we could over the last five years. There’s really only a couple of companies that have that kind of a footprint.

One thing that helps us in particular is we are in a lot of places where there’s not a lot of competition because they don’t have the capacity to go there. We talked about it for a long time.

We started doing networking in Medicare in 2005 preparing for where we are today. There are spots where they’re more competitive than others.You mentioned South Florida; we have dozens of competitors now there, but we continue to grow there and do quite well.

At some point your question will be very appropriate because there is going to be share taken from each other at some point as we all get bigger and bigger. Right now the opportunity to grow is very significant without having to worry about taking somebody else’s customer.

Medicare Enrollment Guidance

Kevin Fischbeck – Bank of America Merrill Lynch asked: Here’ a question on your Medicare enrollment guidance. It looks like the CMS Medicare enrollment data is currently higher than your guidance for the year. Can you talk about that discrepancy?

James H. Bloem – SVP, CFO and Treasurer responded: Generally speaking, Kevin, the way we keep our own records and the way you watch what we get every day, we get our information from the field. There is a general correlation but there are always timing differences with what CMS says.

We tend to look at CMS data that everyone sees and directionally that’s the way our enrollments are moving. In any given period, they’re exactly directly comparable.

Fischbeck followed up: So you’re seeing something different to what CMS is doing. You think CMS’s numbers will catch up to your number eventually?

Bloem responded: Yeah. We have our consistent way of doing our own numbers. So, whenever we give the numbers in our earnings press releases and conferences, that’s computed on what we’re enrolling, what we’re seeing and what sales we’re seeing from our sales force and not from CMS.

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