Humana CEO: Higher insurance premiums ahea

Humana Inc.s new CEO, Bruce Broussard, says that with so many big changes coming in 2014, implementation of the Affordable Care Act is going to be bumpy.

One of my biggest fears is that I don’t think the general public is conditioned to the cost changes that will occur in insurance premiums, he said this week during an interview with The Dallas Morning News.

A recent study in Contingencies magazine, for example, said premiums for those aged 21-29 buying individual coverage could increase by 40 percent because of requirements in the new law. The study looked only at out-of-pocket costs for nongroup purchasers and did not include income-related subsidies that are also part of the law.

It’s going to be the younger, healthier people who pay more, said Broussard, who joined Humana in December 2011 as president and added the CEO title on Jan. 1.

Broussard was in town to visit two subsidiaries of the Louisville, Ky.-based health care company.

Concentra, with headquarters in Addison, offers wellness programs, physical therapy and urgent care services in 40 states. LifeSynch, based in Irving, helps change personal behaviors to improve health and increase productivity.

Humana, which reported nearly $40 billion in revenue for 2012, has more than 200,000 Medicare Advantage members in Texas, as well as 465,000 commercial health plan members.

The company, which divested its hospital business (including Medical City Dallas) in 1993, employs about 2,000 in North Texas and 4,000 in the state.

The company’s wellness message starts at the top.

We wear pedometers in our company, Broussard said. I find that if I don’t exercise in the morning, I only get 2,000 to 3,000 steps a day.

To remain reasonably healthy, you need 10,000 steps a day.

Two thousand steps roughly equals a mile.

Before joining Humana, Broussard was CEO of US Oncology in Houston, where he still lives and commutes to Louisville.

Because of the remaining uncertainties surrounding the health care law, Broussard said, Humana is taking a walk-then-run approach.

They have a lot of work to do,” he said of the government. Some of the rules for the insurance exchanges aren’t out yet. Broussard said his company will initially participate in 10 state exchanges

I think everyone being insured is a good thing, he said. Implementation is going to be bumpy.

Medicare Advantage, run by private insurers under contract with Medicare, is a huge business for Humana, accounting for nearly $25 billion in premium revenue in 2012.

The program helps older Americans manage their care, such as sending social workers to patients homes to make sure they are taking their medications.

With an aging population, Broussard said, his company has increased its number of Medicare Advantage members and market share. Individual membership increased 18 percent to nearly 2 million last year, according to the company’s latest quarterly report.

About 24,000 of those members are in the Dallas-Fort Worth area.

Looking broadly at the health care industry, Broussard foresees lower utilization rates for medical services, continued consolidation of hospitals, and increasing efforts between insurers and providers to coordinate and improve care.

But in the end, he said, the Affordable Care Act won’t do much to lower overall costs.

‘It’s not a cost-saving program,’ Broussard said.

‘This is an insurance program to get more people insured.

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