Humana today said that it could sell individual major medical coverage through Affordable Care Act exchange programs in as many as 156 counties in 2017, but that it might not.

The Louisville, Kentucky-based company said its "individual commercial on-exchange plans for 2017 have yet to be finalized, pending government approval from state and federal regulatory agencies."

Humana's individual commercial health operations are doing so poorly that it added $208 million to a premium deficiency reserve fund for the program for 2016, to reflect that Humana knows that the premiums it set for the exchange plans are too low but that it has no way to increase the premiums.

Humana first announced the premium deficiency reserve increase in July, on the same day the U.S. Department of Justice sued to keep Aetna from acquiring Humana.

Humana is also having trouble with the ACA risk corridors program. ACA drafters created the program to encourage insurers to offer exchange plans for a low price. The program was supposed to use cash from thriving exchange plan issuers to help struggling issuers in 2014, 2015 and 2016.

Because so few insurers did well in the ACA exchange system in 2014, and because Congress blocked the U.S. Department of Health and Human Services from using any cash other than cash from thriving issuers to make risk corridors payments, HHS has sent Humana only $30 million in risk corridors payments. Humana believes HHS owes it a total of $542 million in additional risk corridors payments.

The company reportedly generated a total of $2.5 billion in commercial medical insurance premium revenue in the quarter.

Humana said it wants to continue to sell exchange plans "in markets where it expects to be able to offer a high-quality and ultimately, stable individual commercial health plan."

"The company will continue to evaluate the performance of this business for 2016 as it further develops and the corresponding impact on the [premium deficiency] reserve, if any," the company said.

Humana talked about its ACA exchange business when it posted its earnings for the second quarter.

The company reported $311 million in net income for the second quarter on $14 billion in revenue, compared with $431 million in net income on $14 billion in revenue for the second quarter of 2015.

The company ended the quarter covering 792,000 exchange plan enrollees, down from 1 million a year earlier.

Enrollment in Humana's individual Medicare Advantage plans increased 4 percent, to 2.8 million, and enrollment in its Medicare supplement plans increased 38 percent, to 212,300.

The company said its Medicare business and all other units other than the individual commercial unit did well in the latest quarter.

Aetna, Anthem, Cigna and UnitedHealth have also reported being frustrated with ACA exchange plan results in recent weeks.

Centene and Molina Healthcare, two companies best known for their Medicaid plans, have said they are happy with the performance of their exchange plan operations.

Instant Insights /

Humana says it's still thinking about 2017 ACA exchange strategy

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