Humana anticipates pandemic costs declining this year

Humana anticipates pandemic costs declining this year | Insurance Business America

Humana anticipates pandemic costs declining this year

Major health insurer Humana remains hopeful that business will pick up this year, as the insurer anticipates costs related to COVID-19 treatment to decline faster than demand for elective healthcare services once vaccination against the coronavirus becomes widespread.

The statements come after the company in November said that it expects a profit boost in 2021 thanks to strong growth in its Medicare Advantage health plans.

Read more: Humana predicts profit boost in 2021

“When COVID treatment costs begin to decline, the rate of decline will likely be steeper than the bounce back in non-COVID utilization, potentially creating a favorable impact,” Humana chief financial officer Brian Kane said in a recent post-earnings conference call.

The insurer said that it expects a positive impact of $1.32 billion to $2.04 billion from depressed non-pandemic utilization in its Medicare Advantage health plans for fiscal year 2021. Humana also said that it expects to see double-digit percentage normalization of healthcare utilization throughout the first few months of 2021 – before the levels rise above normal later in the year.

Humana is additionally anticipating COVID-19 treatment and testing costs ranging from $525 million to $925 million in its Medicare business this year.

Reuters reported that Humana posted a smaller-than-expected loss in the fourth quarter of 2020. The company’s gains from lower demand for non-COVID healthcare services made up for spiking costs related to coronavirus testing and treatment.