Humana Earnings Call Nuggets: Medical Cost Trend, CareSource
Medical Cost Trend
Matthew Borsch – Goldman Sachs: Can I just ask on the, your comments on medical cost trend, where you actually saw utilization a bit lower I assume that’s adjusted for the (leap day) impact are you seeing that in both commercial and Medicare and anymore granularity you can give us on that.
Michael B. McCallister – Chairman and CEO: The remarks that I gave were really confined to the commercial because that’s the one that tends to vary more and it was, and I discussed under employer group. But in the Medicare again we’ve not seen a lot of change. So again we are very comfortable with sort of what we’ve been seeing. The leap day was accounted for in our pricing and in how we take into account our medical expense recognition.
Matthew Borsch – Goldman Sachs: Let me ask back on the commercial side, what are you guys seeing now in terms of price competition across your local markets. Would you say that have you seen any change, would you say compared to a year or two ago.
James E. Murray – EVP and COO: This is Jim Murray. The breaking it into the various case sizes the small group block of business seems nicely positioned throughout the markets. Periodically, you’ll see a market get a little bit hot, but generally speaking, we think we are nicely positioned for 2012. We had a nice growth here in 2011 with small group. On the large group side, a case size that continues to always be highly competitive is what we referred to in past as the portfolio size cases are 100 and 300 employees per group and that seems to be very, very competitive in all the market places that we do business. Nothing real crazy in terms of the self-funded competitive landscape, every now and again, you see a quote for a particular case that you scratch your head about, but nothing systematic. So, well-positioned in the smaller case sizes. The portfolio is a little bit aggressive in various other markets that we do business, but as you can see from some of the guidance points that we gave, the fully insured growth potential that we see for 2012 is positive for us, and we are just blocking and tackling.
Matthew Borsch – Goldman Sachs: So, I would take then that the growth is more on the individual small group side and less on I guess what we referred to as middle market?
Michael B. McCallister – Chairman and CEO: That’s a fair point, yes.
Joshua Raskin – Barclays: First question I just want to start on CareSource and the relationship there. I guess, Mike, you talked about whatever it was three months ago, when you had last call, about several opportunities that you are exploring around the distribution of the duals. Obviously CareSource was a huge one. I’m just curious did that help or hinder other discussions with other plans? Then if you could sort of run through what the financials will look like on that partnership? And then I guess lastly, were you aware that they were going to exit Michigan when you guys entered into that relationship?
Michael B. McCallister – Chairman and CEO: I’ll answer last one first, yes, we are aware of that. I think that CareSource represents one effort to address the marketplace and it’s a great opportunity for us, multiple states involved here with a great player. We are talking to others. There will be – and yes, it gets everyone’s attention when you actually reach an agreement with somebody because everyone is positioning and trying to figure out how to get positioned for the Medicaid dual – the Medicaid business with the dual eligible’s being the primary driver. So there is a lot of chairs moving around and this was a great opportunities for us to work with somebody in a key state to start with and multiple states over time. And we haven’t shared the economics of the relation in detail. I don’t think we’ll be doing that, but this is the first step and we’re going to very thoughtful and make sure that we reach this market in an appropriate fashion.
James H. Bloem – SVP, CFO and Treasurer: Michigan we were.
Michael B. McCallister – Chairman and CEO: Yes.
Joshua Raskin – Barclays: Just switching topics a little bit to the industry tax or fee, whatever you want to call it that begins to be paid in ‘14, but there is discussion around potential accruals to federal in ‘13. So I am just curious, how are you guys thinking about that as you prepare your bids, what is it now five weeks away in terms of 2013?
Michael B. McCallister – Chairman and CEO: We are not going to be having to deal with that tax for 2013 bids Josh, so we will be dealing with it next year.
Joshua Raskin – Barclays: So you don’t plan to accrue it all in 2013?
Michael B. McCallister – Chairman and CEO: No, we don’t.