Humana Protests Award for Third Generation of TRICARE Contracts
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Under its existing TRICARE contract, Humana Military provides managed
care services supporting the DoD’s delivery of health benefits to
approximately 3 million active duty service men and women, their
dependents, as well as retired service members and their families in
The company is currently evaluating how its results of operations for the second half of 2009 and for 2010 may be affected by issues associated with the previously announced change in its military services contract. This would primarily include such issues as impairment of military services goodwill, potential military services exit costs, possible military services asset sales, and a strategic assessment of ancillary military services businesses. The company cannot yet determine a reasonable estimate of the impact of such issues.
Cautionary Statement
This news release includes forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. When used in
investor presentations, press releases,
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If
Humana does not design and price its products properly and competitively, if the premiumsHumana charges are insufficient to cover the cost of health care services delivered to its members, or if its estimates of benefits payable or future policy benefits payable based upon its estimates of future benefit claims are inadequate, Humana’s profitability could be materially adversely affected.Humana estimates the costs of its benefit expense payments, and designs and prices its products accordingly, using actuarial methods and assumptions based upon, among other relevant factors, claim payment patterns, medical cost inflation, and historical developments such as claim inventory levels and claim receipt patterns. These estimates, however, involve extensive judgment, and have considerable inherent variability that is extremely sensitive to payment patterns and medical cost trends. -
If
Humana fails to effectively implement its operational and strategic initiatives, including itsMedicare initiatives, the company’s business could be materially adversely affected. -
If
Humana fails to properly maintain the integrity of its data, to strategically implement new information systems, or to protect Humana’s proprietary rights to its systems, the company’s business could be materially adversely affected. -
Humana is involved in various legal actions, which, if resolved unfavorably toHumana , could result in substantial monetary damages. Increased litigation and negative publicity could increase the company’s cost of doing business. -
As a government contractor,
Humana is exposed to additional risks including reimbursement and payment changes that could adversely affect its business or its willingness to participate in government health care programs. - Humana’s industry is currently subject to substantial government regulation, which along with possible increased governmental regulation or legislative change, could increase Humana’s cost of doing business and could adversely affect the company’s profitability.
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Humana is also subject to potential changes in the political environment that can affect public policy and can adversely affect the markets for its products. - Any failure to manage administrative costs could hamper Humana’s profitability.
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Any failure by
Humana to manage acquisitions and other significant transactions successfully could have a material adverse effect on its financial results, business and prospects. -
If
Humana fails to develop and maintain satisfactory relationships with the providers of care to its members, the company’s business could be adversely affected. - Humana’s mail order pharmacy business is highly competitive and subjects it to regulations in addition to those the company faces with its core health benefits businesses.
- Humana’s ability to obtain funds from its subsidiaries is restricted by state insurance regulations.
- Downgrades in Humana’s debt ratings, should they occur, may adversely affect its cost and availability of funds.
- Extreme volatility and disruption in the securities and credit markets may adversely affect Humana’s business, results of operations and financial condition.
- Changes in economic conditions could adversely affect Humana’s business and results of operations.
- Given the current economic climate, Humana’s stock and the stock of other companies in the insurance industry may be increasingly subject to stock price and trading volume volatility.
In making forward-looking statements,
- Form 10-K for the year ended December 31, 2008;
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Form 10-Q for the quarter ended
March 31, 2009 ; - Form 8-Ks filed during 2009.
About
Humana Military, a wholly owned subsidiary of
About
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Source:
Humana Military Healthcare Services
Julie Ice, 502-301-6982
jice@humana.com
or
Humana
Inc.
Corporate Communications:
Tom Noland, 502-580-3674
tnoland@humana.com
or
Investor
Relations:
Regina Nethery, 502-580-3644
rnethery@humana.com