Humana Inc. (HUM) recently announced an exclusive agreement with Veterans of Foreign Wars (VFW). Under this deal, the company will be the exclusive provider of Medicare Advantage (MA) plans to the organization’s members throughout the U.S. VFW is the country’s biggest and oldest war veteran organization with over 700,000 members.
This opens up a huge base of prospective clientele for Humana. The company can now offer its MA health plans to VFW members and their spouses who are qualified for Medicare. In addition, Humana will be able to provide assistance to those who will be eligible for the program with time.
Additionally, Humana will conduct Medicare seminars for VFW members in the approaching Medicare Annual Election Period and hold informative seminars all through the year to keep them aware of the available Medicare alternatives. The company will also supply information about Medicare Advantage to these members through web-based tools, in-home appointments, call centers, and self-enrollment.
The agreement should boost Humana’s Medicare Advantage membership and consequently, premiums and services revenues. This will be beneficial for the company since it is heavily reliant on Medicare Advantage revenues, which accounted for 60.5% of its health-insurance premium revenues in 2011. It will also help the company in its initiative to support the well-being of veterans by providing the necessary tools, information and support.
Humana has been involved in providing health benefit support and services to active and retired military members and their families through its subsidiary Humana Military Healthcare Services, Inc. The latter has a wholly-owned subsidiary – Humana Veterans – dedicated to providing healthcare services to war veterans.
Humana Inc. is one of the largest health care plan providers in the U.S. and competes with other industry heavyweights like WellPoint Inc. (WLP) and Aetna Inc. (AET). The company carries a Zacks #4 Rank, which translates into a short-term Sell rating. We have a long-term ‘Underperform’ recommendation on the stock.
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