Humana Merger Analysis

The Patient Protection and Affordable Care Act (Obamacare) had mame dramatic changes in the field of the health care system, especially in Medicare, that will seriously take effect in American seniors. Indeed, much of the health law’s new spending is financed by spending reductions in the Medicare program. In addition to the provider payment reductions, Obamacare significantly reduces payments to Medicare Advantage (MA) plans by an estimated $156 billion from 2013 to 2022.( Elmendorf, letter to Speaker Boehner). About 27 percent of all Medicare beneficiaries are enrolled in MA plans, a system of regulated and private plans competing against each other as an alternative to traditional Medicare. MA plans are attractive to beneficiaries because they offer more generous and comprehensive coverage than traditional Medicare by capping out-of-pocket costs and offering drug coverage to a rasonable

At last, the law gave new alternatives and motivating forces to help states rebalance their Medicaid long haul mind programs for group based administrations and backings as opposed to institutional care. All in all, these arrangements have quickened Medicaid advancement effectively in progress in numerous states. Also improved with the ACA besides Medicaid, is Medicare. The Affordable Care Act incorporates a progression of Medicare changes that will create billions of dollars in reserve funds for Medicare and fortify the care Medicare recipients get. The new law secures ensured benefits for all Medicare recipients, and gives new advantages and administrations to seniors on Medicare that will help keep seniors solid. The law likewise incorporates arrangements that will enhance the nature of care, create and advance new models of care conveyance, suitably value administrations, modernize our wellbeing framework, and battle waste, extortion, and mishandle. A big topic that is affected from ACA is businesses. The Patient Protection and Affordable Care Act -- otherwise known as Obamacare -- is putting such a small dent in the profits of U.S. companies that many refer to its impact as 'not material' or 'not significant. Even after a provision went into effect this year requiring companies with 50 or more full-time workers to provide coverage, and after more workers are choosing to enroll in existing company coverage because of another requirement that all Americans get

Fifty years ago, Lyndon B. Johnson signed the Medicare program into law. “It has been a reliable guarantor of the health and welfare of older and disabled Americans by paying their medical bills, ensuring their access to needed health care services, and protecting them from potentially crushing health expenses.” (Hamel, Blumenthal, Davis, & Guterman, 2015, p. 479). With the encouragement of George W. Bush, congress passed the Medicare Modernization Act of 2003 (MMA). The MMA extended Medicare to include prescription-drug coverage, known as Medicare Part D. In 2013, Medicare covered the health care expenses for 52.3 million Americans, costing $583 billon. Originally, Medicare had difficulty controlling costs; physicians and hospitals were

The first concern that is affected by cost shifting lies in the Medicare system. Medicare is provided to individuals who are 65 and older to obtain adequate healthcare, as well as decreasing financial worries. The government’s involvement in controlling the healthcare system can be a major disadvantage to the Medicare system, as well as private insurances. Reimbursement from private insurances and Medicare can be affected so severely that obtaining access to Medicare can become a major issue. Furthermore, the repercussion is illustrated by Dr. Lichter’s statement, “Either something happens or the healthcare system is threatened.” Without cost containment, there will be major shifts of costs to private payers and Medicare beneficiaries” (Hayes, 2008).

In the last 10 years funding of Medicare and Medicaid has been on the decline each year. According to the Heritage Foundation (2017) “The law cuts an estimated $716 billion from Medicare over ten years. However, these "savings" are not set aside to preserve Medicare's future” This is a significant amount of resources that were cut from the people in need of these subsidized programs ; and these cuts have resulted in less health care coverage for Medicaid recipients. The cuts have also resulted in poor service for the elderly covered under

Medicare is America’s largest health insurance program for the men and women over the age of 65 or with certain disabilities. For many Americans, this a huge part of how they can afford medications, doctor visits and other medical expenses. In recent years the number of Medicare enrollees has doubled (NASI, 2015). The “Baby Boomers”, people born from 1946-1965, is the largest generation within America with roughly 75 million Americans. This generation of Americans are all turning 65 around the same time and enrolling into this medical program. With the amount of new enrollees the total spending for Medicare will rise from 3.6% of the nations GDP to 5.1% by 2030, when the youngest of the baby boomer generation will be 65 (NASI, 2015). Even

Humana Inc. was founded in 1961 and is headquartered in Louisville, Ky. Humana employs 50.1k total employees and reported operating revenues of $54+ million in 2015 (www.macroaxis.com). Humana is one of the largest publicly traded health benefits companies that offers insurance coverage and related services through a variety of traditional internet-based plans for employer groups, government-sponsored programs, and individuals (www.csimarket.com). Humana’s business strategy is bringing consumerism to healthcare. They base their innovative products and initiatives around consumers. Humana has embarked on more than a dozen pilot programs to test possible ways to impact access to care, lower costs, and improve health outcomes.

Due to the upcoming presidential election, the two major political parties, and their candidates, have been focusing on the primary problems that the nation will face. Chief among those problems is the future of Medicare, the national health-insurance plan. Medicare was enacted in 1965, under the administration of Lyndon B. Johnson, in order to provide health insurance for retired citizens and the disabled (Ryan). The Medicare program covers most people aged 65 or older, as well as handicapped people who enroll in the program, and consists of two health plans: a hospital insurance plan (part A) and a medical insurance plan (part B) (Marmor 22). Before Medicare, many Americans didn't have health

The History of the UnitedHealth Group dates all the way back to 1977 when the company was first established. Since 1977 the company has flourished and become the largest health insurer in the world. The company has accomplished so much over the years and has been recognized for their accomplishments on many occasions. (#1) For five consecutive years the UnitedHealth Group has been named “World’s Most Admired Company” in the insurance and managed care sector by Fortune. (#2) The company was also named a 2016 top 100 military friendly employer and 2016 military spouse friendly employer by

The growing concern regarding the financial security of Medicare is one of particular interest to the nearly 72 million baby boomers that become eligible for this government-assisted, and tax-payer bolstered, program over the next two decades. According to the U.S. Census Bureau (2010), there will be a rapid increase in baby-boomers between 2010 and 2030, as the entire baby boomer population move into the 65 years and over category (p.3). Political and financial revisions must be made to ensure the security of Medicare as the numbers of individuals paying into this program are soon to be surpassed by the number of individuals drawing-off this program (U.S. Census Bureau, 2010). The elderly are also at a disadvantage with transportation to health care visits, picking up prescriptions, and rehabilitation services. There needs to be an establishment of access not only to primary care providers, hospitals, and rehabilitation services, but access to other aspects of the health care system for the elderly population.

The higher cost of affordable Health care is also eroding the ease with which to afford other insurance that covers about 30 percent of Medicare enrollees ‘expenses. In 2005, about 89 percent of beneficiaries obtained such additional coverage, including through former employers (33 percent), medical policies (25 percent), Medicare advantage plans (13 percent), Medicaid (16 percent), or other programs (1 percent) (MedPAC). These supplemental insurance programs were all very helpful at the onset, but with the passage of time and as health care costs continued to rise, employers are finding it difficult to support these programs and as a consequence, a greater number of these employers are either reducing the benefit or eliminating these benefits especially those that affects their retirees thereby increasing the cost of these supplemental insurances.

My observations in my role at CHS leaves me saddened at the current state of the health care industry. While working on the clinical side of health care, I basically only saw things from the patient care perspective. I did not understand why insurance companies would refuse coverage to patients or denied payment to the providers. I have witnessed the sick versus the healthy leading to disparity in health insurance coverage. Insurance companies tend to ostracize or avoid the sick people that need the coverage while covering the healthy people instead (Morone, Litman, & Robins, 2009). I thought that the payers were only concerned with not paying for health care. However, once I came to the financial side, I learned of how much hospitals

As a Fortune 150 company with a 45-year history in the health industry and more than eleven million members under its wings, Humana has become one of the largest health benefit company in the U.S. With its slogan, “Guidance when you need it most”, Humana has gain their success through their diverse business units, outstanding wellness program and reliable customer service. The company is basically operates through two business division: government and commercial. The government division serves everyone who is enrolled in government-sponsored program such as Medicare, Medicaid and TRICARE. On the other hand, the commercial division handles employers groups and individuals under fully insured medical or specialty medical.

This was recognized as a factor that observed most insurers cut off the number of covered employers while paying up the consumers. In fact, recent times have seen a gradual increase in the medical costs and expenditure on healthcare services. With an increased cost of healthcare and a decreased number of uninsured individuals, the healthcare insurance industry has begun to thrive. It has experienced an increase in the number of insurance firms, while a decrease in the market concentration (Cole, He, & Karl, 2014). In addition, the industry appreciates the increased premium rates and acknowledges the increased insurance penetration, especially among the aging population. Currently, the health insurance market is facing a threat of restrictive regulatory practices which seek to reduce the profit margins of the company. However, the aging population and a rise of a median population that is attentive on medical insurance offers a great opportunity for expansion. The success of a firm in this field has been characterized by having a reputable image, a well-established distribution linkage and a capacity to delegate cost rises to the consumer (Santerre, & Neun,

After four decades of failure to enact a universal healthcare program, advocates decided to refine their approach in the 1950s, and the strategy that ultimately led to the passage of Medicare and Medicaid was formulated. Wilbur Cohen and I.S. Falk recognized that a health insurance plan focused on Social Security beneficiaries would be much easier to sell than a plan for all Americans. By limiting its benefits to the elderly, Medicare could be portrayed as a program for people who met two important criteria: they had greater need for healthcare coverage and they were especially deserving of public assistance. Because of their age, seniors have relatively high medical costs--when Medicare was passed, average healthcare expenses for people sixty-five or older were twice the average expenses for younger persons. (Orentlicher, D. (2012).