UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 5, 2024 (February 5, 2024)
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Item 7.01 Regulation FD Disclosure.
On Wednesday, January 31, 2024, after the stock market closed, the Centers for Medicare and Medicaid Services (CMS) issued its preliminary 2025 Medicare Advantage and Part D payment rates and proposed policy changes (collectively, the Advance Notice). CMS has invited public comment on the Advance Notice before publishing final rates on April 1, 2024 (the Final Notice).
In the Advance Notice, CMS estimates Medicare Advantage plans across the sector will, on average, experience a 0.16 percent decrease in benchmark funding based on proposals included therein. As indicated by CMS, its estimate excludes the impact of fee-for-service county rebasing/re-pricing since the related impact is dependent upon finalization of certain data, which will be available with the publication of the Final Notice.
Based on Humana Inc.’s (the “company”) preliminary analysis using the same factors included in CMS’ estimate, the components of which are detailed on CMS’ website, the company anticipates the proposals in the Advance Notice would result in a change to its benchmark funding that is approximately 160 basis points worse than its expectation of a flat rate environment. This difference is primarily due to the proposed effective growth rate restatements, which the company did not anticipate in light of the higher medical cost trends experienced across the industry, as well as the negative impact of CMS’ proposed normalization factors. As part of its typical engagement with the agency, the company will provide actuarial data with respect to its concerns regarding these items.
The company will continue to analyze the Advance Notice and will draw upon its program expertise to provide CMS formal commentary on the impact of the Advance Notice and the related impact upon Medicare beneficiaries’ quality of care, affordability, and service to its members through the Medicare Advantage program.
There is no change to the company’s 2025 outlook of $6 to $10 in Adjusted Earnings Per Share (EPS) growth as the Advance Notice is preliminary and the company, along with others in the industry, are expected to provide feedback to CMS regarding the Advance Notice as described above.
Cautionary Statement
This Current Report on Form 8-K includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, generally including the words or phrases like “expects,” “believes,” “anticipates,” “intends,” “likely will result,” “estimates,” “projects” or variations of such words and similar expressions that are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and assumptions, including, among other things, information set forth in the “Risk Factors” section of the Company’s SEC filings.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
| HUMANA INC. | |||||
| BY: | /s/ John-Paul W. Felter | ||||
| John-Paul W. Felter | |||||
| Senior Vice President, Chief Accounting Officer & Controller (Principal Accounting Officer) | |||||
Dated: February 5, 2024