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    Humana Inc (HUM)

    CFO Change

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    Business Description

    Humana Inc., headquartered in Louisville, Kentucky, is a leading health and well-being company that operates primarily through its Insurance and CenterWell segments. The company provides a wide range of health insurance products, including medical, dental, hearing, vision, and prescription drug coverage, with a significant emphasis on Medicare Advantage, Medicaid, and Military offerings . Additionally, Humana offers health services through its CenterWell segment, which includes pharmacy solutions, primary care, and home health services, along with strategic partnerships to develop senior-focused primary care centers .

    1. Insurance - Offers a comprehensive range of health insurance products, focusing on Medicare Advantage, Medicaid, and Military offerings, as well as dental, hearing, vision, and prescription drug coverage .

      • Medicare Advantage - Provides enhanced health insurance plans for seniors, focusing on comprehensive care and additional benefits.
      • Medicaid and Military - Delivers health insurance solutions tailored for Medicaid recipients and military personnel.

    2. CenterWell - Delivers health services, including pharmacy solutions, primary care, and home health services, with a focus on senior care through strategic partnerships .

      • Pharmacy Solutions - Offers medication management and pharmacy services to improve patient outcomes.
      • Primary Care - Provides primary healthcare services with an emphasis on senior-focused care centers.
      • Home Health Services - Offers in-home healthcare services to support patient recovery and well-being.

    Key Metrics

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    Executive Team

    NamePositionStart DateShort Bio
    Bruce D. BroussardChief Executive Officer and DirectorJanuary 1, 2013Bruce D. Broussard joined Humana in December 2011 as President and was elected CEO on January 1, 2013. Before joining Humana, he served as CEO of McKesson Specialty/US Oncology, Inc., holding various senior executive roles .
    Vishal Agrawal, M.D.Chief Strategy and Corporate Development OfficerDecember 2018Vishal Agrawal, M.D. joined Humana in December 2018. Prior to this, he was a Senior Advisor for The Carlyle Group L.P. and served as President and Chief Growth Officer of Ciox Health .
    Samir M. DeshpandeChief Information OfficerJuly 2021Samir M. Deshpande was elected Chief Information Officer in July 2021. He joined Humana in July 2017 after 17 years at Capital One, where he held key leadership positions .
    Susan M. DiamondChief Financial OfficerJune 2021Susan M. Diamond became CFO in June 2021. She joined Humana in June 2004 and has held various leadership roles, focusing on growth and consumer segmentation strategies .
    John-Paul W. FelterSenior Vice President, Chief Accounting OfficerAugust 2022John-Paul W. Felter was elected to his current position in August 2022. Before joining Humana, he served as Senior Director - Investment Finance for OneAmerica Financial Partners, Inc. and spent nearly 11 years at Ernst & Young LLP .
    William K. FlemingChief Corporate Affairs OfficerApril 2023William K. Fleming, PharmD, was elected Chief Corporate Affairs Officer in April 2023. He joined Humana in 1994 and has held various positions, including Segment President of Pharmacy Solutions .
    Timothy S. HuvalChief Administrative OfficerJuly 2019Timothy S. Huval became Chief Administrative Officer in July 2019. He joined Humana after 10 years at Bank of America in multiple senior-level roles .
    James A. RechtinPresident and Chief Executive OfficerJanuary 2024James A. Rechtin was elected President and CEO in January 2024. Prior to Humana, he was President and CEO at Envision Healthcare and held senior roles at OptumCare and Davita Medical Group .
    George Renaudin IIPresident, Medicare & MedicaidFebruary 2023George Renaudin II was elected to his current position in February 2023. He joined Humana in April 2004 and has held various leadership roles, most recently as President, Medicare .
    Sanjay K. Shetty, M.D.President, CenterWellApril 2023Sanjay K. Shetty, M.D. became President of CenterWell in April 2023. Before joining Humana, he spent nearly 13 years at Steward Health Care System in multiple senior-level roles .
    Joseph C. VenturaChief Legal OfficerFebruary 2019Joseph C. Ventura joined Humana in January 2009 and became Chief Legal Officer in February 2019. He previously served as Senior Vice President, Associate General Counsel & Corporate Secretary .
    Celeste MelletChief Financial OfficerJanuary 11, 2025Celeste Mellet will be appointed CFO effective January 11, 2025. She previously served as CFO of Global Infrastructure Partners and held senior roles at Evercore and Fannie Mae. Her career includes over 18 years at Morgan Stanley .

    Questions to Ask Management

    1. Given the higher inpatient admissions observed in the latter half of the second quarter and continuing into July, can you provide more details on the specific steps you are taking to mitigate this pressure, and how confident are you that these measures will effectively offset the inpatient cost overruns going forward?

    2. You mentioned that achieving normalized margins in your Medicare Advantage business will take multiple years due to regulatory constraints and TBC limitations; can you elaborate on the specific challenges you face and what strategies you have in place to accelerate margin recovery before 2027? ,

    3. With the planned exits from certain markets due to unprofitable plans, how do you anticipate these exits will impact your overall membership growth and earnings in 2025, especially considering the potential retention of members through other plan options? ,

    4. Regarding your cost management efforts, you've highlighted investments in automation and technology, including partnerships with Google for AI initiatives; can you provide specific examples of how these investments are translating into measurable cost reductions and operational efficiencies, and what is the expected timeline for realizing these benefits? ,

    5. There have been concerns that extensive cost-cutting measures might have affected your ability to respond swiftly to emerging cost pressures, such as the higher inpatient costs attributed to the two-midnight rule; how do you address this concern, and what safeguards are in place to ensure essential capabilities are not compromised by cost reductions?

    Share Repurchase Program

    Program DetailsProgram 1Program 2
    Approval DateFebruary 2023 February 16, 2024
    End Date/DurationReplaced by 2024 authorization on February 16, 2024 Expires February 15, 2027
    Total additional amountNot specified $3 billion
    Remaining authorization amountN/A $2.93 billion as of October 29, 2024
    DetailsApproximately $824 million remained unused before replacement Part of capital deployment strategy, includes investments in organic growth and CenterWell capabilities

    Debt Maturity Schedule

    YearAmount Due (in millions)Debt TypeInterest Rate (%)% of Total Debt
    2024$600Senior Notes3.8504.6% = (600 / 13,022) * 100
    2025$1,177Senior Notes4.5009.0% = (1,177 / 13,022) * 100
    2026$500Senior Notes5.7003.8% = (500 / 13,022) * 100
    2027$1,350Senior Notes1.350, 3.95010.4% = (1,350 / 13,022) * 100
    2028$1,000Senior Notes5.7507.7% = (1,000 / 13,022) * 100
    2029$1,250Senior Notes3.700, 3.1259.6% = (1,250 / 13,022) * 100
    2030$500Senior Notes4.8753.8% = (500 / 13,022) * 100
    2031$1,250Senior Notes5.3759.6% = (1,250 / 13,022) * 100
    2032$750Senior Notes2.1505.8% = (750 / 13,022) * 100
    2033$750Senior Notes5.8755.8% = (750 / 13,022) * 100
    2034$850Senior Notes5.9506.5% = (850 / 13,022) * 100
    2038$250Senior Notes8.1501.9% = (250 / 13,022) * 100
    2042$400Senior Notes4.6253.1% = (400 / 13,022) * 100
    2044$750Senior Notes4.9505.8% = (750 / 13,022) * 100
    2047$400Senior Notes4.8003.1% = (400 / 13,022) * 100
    2049$500Senior Notes3.9503.8% = (500 / 13,022) * 100
    2053$750Senior Notes5.5005.8% = (750 / 13,022) * 100
    2054$1,000Senior Notes5.7507.7% = (1,000 / 13,022) * 100

    Customer Concentration

    CustomerRelationshipSegmentDetails
    Centers for Medicare & Medicaid Services
    Provides health insurance coverage to 851,300 Medicare Advantage members in Florida.
    Medicare Advantage
    14% of total premiums and services revenue for the year ended December 31, 2023.
    TRICARE T2017 East Region
    Military services contract covering approximately 6.0 million TRICARE beneficiaries across 32 states.
    Military Services
    1% of total premiums and services revenue for the year ended December 31, 2023.

    Auditor

    NameStart DateEnd DateReason for Change
    PricewaterhouseCoopers LLP1968 PresentCurrent auditor

    Latest news

    Recent developments and announcements about HUM.

    Corporate Leadership

      CFO Change

      ·
      Dec 3, 2024, 1:45 PM

      Susan M. Diamond, the current Chief Financial Officer (CFO) of Humana Inc., will be transitioning from her role on January 10, 2025, to pursue personal and professional goals. She will continue to serve in an advisory capacity until December 31, 2025. Celeste Mellet has been appointed to succeed her as CFO, effective January 11, 2025. Diamond's departure is not due to any disagreement with the company .

      Leadership Change

      ·
      Dec 3, 2024, 1:45 PM

      Susan Diamond is leaving her role as Chief Financial Officer (CFO) of Humana Inc. to pursue personal and professional goals. She will transition from her current role on January 10, 2025, and will serve in an advisory capacity until the end of 2025 . Celeste Mellet will step up as the new CFO, effective January 11, 2025. Mellet is currently the CFO of Global Infrastructure Partners and has extensive experience in financial management .