How big is Humana Health Insurance?
Medical insurance is a majorly competitive industry, and with current legislation making it more important than ever to obtain insurance, insurers are fighting for every customer they can. While some companies offer a more blanketed approach to healthcare coverage, providing policies to as wide of a base as they can, others have focused on a single niche of the market and hold onto it tenaciously. This niche marketing helps a company develop its identity and is a valuable strategy in a competitive market.
Humana, an insurance company specializing in care for seniors and middle-aged customers, has experienced rapid growth over the last several years. As the Baby Boom generation ages, Humana’s client base swells and its market share increases. Of course, Humana doesn’t just serve the elderly; it offers a wide variety of individual, group and Medicare policies, as well as supplemental insurance. Its primary focus remains on healthcare for retirees and seniors, however, and with this age group rapidly growing, there’s plenty of room for Humana to grow.
History of Humana
Like other insurance companies, Humana started off in the hospital business. It began in 1961 as a nursing home provider, Extendicare, before purchasing hospitals and expanding its client base. By 1972, it was the largest healthcare provider in the country, and it continued to grow and expand in the years that followed. It moved from a care provider to an insurance provider in 1984.
Since its foray into health insurance, Humana has extended its services substantially. In addition to private and group health plans, it offers Medicare supplemental insurance and a mail-order pharmacy plan called RightSource Rx. Although several competitors have attempted to buy out the company in recent years, Humana remains independent and has sought numerous ways to grow and expand its size and influence.
How Big is Humana?
Humana is located in Kentucky, where it is the largest Fortune 100 company in the state. It’s the fourth largest insurance company in the United States, holding 4.56% of the total market share. The company has over 30 million policyholders and generates an impressive $36.5 billion in revenue.
In Medicare alone, Humana owns 16% of the market share, making it the second largest insurer of Medicare coverage. Although its share is lower than Kaiser, the third on the list, it is growing rapidly and may someday eclipse other members of the top five insurance providers. Approximately 1.9 million members are on Medicare plans, and these plans bring in over 50% of the company’s profits.
While other insurance companies have increased their size and profit margins by catering to Medicaid programs and outsourcing pharmacies, Humana has stuck close to its initial customer base. A company deeply rooted in healthcare for aging patients, Humana’s background in nursing homes is clear by its attention to Medicare. At present, the company is the second largest provider of Medicare coverage in the country, and as its customer base grows, its ownership of the market will continue to swell.
The company is growing at a remarkable rate. Since 2010, Humana’s market share has increased by an impressive 46%, and the growth is steadily increasing. Other companies that provide Medicare coverage are enjoying similar growth thanks to the aging demographic of Baby Boomers, but these rivals are growing at a slower rate. Humana’s tight focus on its demographic has given it a competitive edge in this area.
Humana does face one risk in its growth. Because of its heavy reliance on Medicare policies, Humana is largely funded by the government. With the nation’s financial struggles and the uncertainty of medical care in the future, it may begin to lose funding; if this occurs, Humana will be forced to rely on private and group policies to make a profit.
This will cause it to lose some footing in the market, since many seniors do not have any healthcare options beyond Medicare, but only time will tell if the healthcare industry will move toward this outcome in the near future.
Humana has anticipated some of these changes, and has begun expanding its policies carefully in order to compensate for potential lost profits. In addition to its Medicare policies, pharmaceuticals and standard group and private policies, Humana is slowly expanding into other fields.
It purchased Concentra, which focuses on workplace health and other types of care clinics, and is looking into expanding into home care. This added focus on home healthcare would deepen the company’s link to the elderly and widen its influence in that sphere, increasing its overall size and revenue without losing hold of its hyper-focus in the industry.