Humana faces risks from fluctuating interest rates impacting investment securities' fair value, potential declines in fair value, and realized losses. The company's Medicare Advantage contracts are subject to risk-adjustment model changes, potentially leading to lower premium payments. Litigation, including lawsuits related to risk adjustment and Star Ratings, poses a significant financial risk. Adverse regulatory changes and investigations could also negatively impact operations and financial position. The company's exit from the Employer Group Commercial Medical Products business also presents a risk.
Financial Upside
Humana's strategy focuses on integrated care delivery, aiming for long-term growth in membership and earnings. Increased Medicare Advantage membership and higher per-member Medicare premiums are driving revenue growth. Value creation initiatives are expected to improve administrative cost efficiencies. The company's investment portfolio, including cash and cash equivalents, provides adequate resources for operations and future expansion.
