Preliminary observations on Humana Medicare Advantage Rates

Preliminary observations on Humana Medicare Advantage Rates for 2010 and Reaffirms 2009 EPS Guidance
Business Editors / Health / Medical Writers

LOUISVILLE, Ky. - (BUSINESS WIRE) - February 23, 2009 - Friday 20 February 2009, the stock after the market close, the Centers for Medicare and Medicaid Services (CMS) announced in 2010 before Medicare Advantage payment rates. CMS invited public comment on these preliminary rates before releasing the final rate on 6 April 2009.

Humana Inc. (NYSE: HUM) is closely analyzing all aspects of the CMS announcement because the company found some assumptions underlying the preliminary 2010 rates unusual and inconsistent with decades of experience and with CMS's past practice. In addition, as announced rates would have a significant negative impact on 2010 premiums and benefits for members of Medicare Advantage, if the rates become final.

In particular, the company has to consider carefully:


the rate of change in the trend of medical costs,
the hypothesis on the impact of general economic conditions on medical expenses,
assumptions about the differences between the original payment method for Medicare and Medicare Advantage, and
the assumption that the payment reductions to physicians about 20 percent are likely to occur.

Humana joins with the entire industry of health benefits in this analysis and plans to be part of an industry on the CMS announcement.

The company also today reiterated its 2009 earnings per share of $ 5.90 to $ 6.10.

Cautionary Statement

This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. When used in investor presentations, press releases, Securities and Exchange Commission (SEC) filings, and oral statements made by or with the approval of one of our executive officers, words or phrases such as "expects," "anticipate," "intends," "likely result", "estimates", "projects" or variations of such words and similar expressions are intended to identify such forward-looking statements . These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions, including, inter alia, information contained in the "Risk Factors" of our SEC, a summary that includes, but is not limited to:


If Humana does not design its products and competitive prices, well, Humana premiums are insufficient to cover the cost of health care services provided to its members, or if its estimates of benefits payable or to the future Policy benefits payable according to its estimate of future claims for benefits are insufficient, Humana profitability could be materially affected. Humana says the cost of its cost of payments, and designs and prices its products accordingly, using methods and actuarial assumptions based on, among other relevant factors, patterns of demand for payment, the medical cost inflation, and the historical developments such as the inventory levels and demand patterns reception. These estimates, however, require a decision, and have a large inherent variability which is extremely sensitive to payment methods and changes in medical costs.
Humana If not able to implement its strategic initiatives and operational initiatives including Medicare, Humana business could be adversely affected.
Humana If not able to keep the integrity of its data, implement a new strategy for information systems, or to protect the property rights of Humana for its systems, the business could be adversely affected.
Humana is involved in various legal actions, which, if resolved unfavorably to Humana, could result in damages. Increased litigation and negative publicity Humana could increase the cost of doing business.
As a government contractor, Humana is exposed to additional risks, including reimbursement and payment changes that might adversely affect its business or its willingness to participate in health care programs.
Humana industry is currently subject to government regulation, which, with the possible increase in government regulation or legislative reform, the company could increase the cost of doing business and could adversely affect the profitability of Humana .
Humana is also subject to possible changes in the political environment that can influence public policy and can affect the markets for its products.
Any failure to manage the administrative costs could hinder Humana profitability.
Any failure by Humana to manage acquisitions and other significant transactions successfully could harm the financial results of the undertaking and prospects.
Humana If not able to develop and maintain satisfactory relationships with providers of care to its members, Humana business could be adversely affected.
Humana pharmacy mail order business subject to regulation, in addition to the company faces with its major health benefits companies.
Humana's ability to obtain funds from its subsidiaries is restricted by insurance regulations.
Humana down debt rating, should they occur, Humana May affect the cost and availability of funds.
The extreme volatility and disruption in the securities and credit markets affect May Humana's business, operating results and financial condition.
Changes in economic conditions could affect Humana business and operating results.

By making forward-looking statements, Humana is not undertaking to address or update in future filings or communications regarding its activities or results. In light of these risks, uncertainties and assumptions, forward-looking events discussed herein might not occur. There are other risks of May that we are unable to predict yet. Each of these risks and uncertainties May, the actual results to differ materially from the results discussed in forward-looking statements.

Humana advises investors to read the following documents filed by the company with the SEC for further discussion of both the risks it faces and its historical performance:


Form 10-K for the year ended December 31, 2008;
Form 8-K filed during 2009.

About Humana

Humana Inc., headquartered in Louisville, Kentucky, is one of the largest listed health and supplemental benefits companies, with approximately 10.6 million medical members. Humana is a full-service benefits solutions, offering a wide range of health and supplementary benefit plans for employer groups, government programs and individuals.

During its 48 year history, Humana has consistently seized opportunities to meet changing customer needs. Today, the company is a leader in consumer engagement, providing guidance that leads to lower costs and better health care system throughout its diverse portfolio of clients.

More information about Humana is available to investors via the Investor Relations of the company's Web site www. Humana.com, including copies of:


The annual reports to shareholders;
Securities and Exchange Commission filings;
The most recent conference presentations to investors;
Quarterly Results;
Replays of most recent earnings release conference calls;
Calendar of events (including upcoming earnings conference call dates and times, as well as interactions with analysts and institutional investors);
Corporate Governance information.

Humana Investor Relations
Regina Nethery, 502-580-3644
Rnethery@humana.com
or
Humana Corporate Communications
Tom Noland, 502-580-3674
Tnoland@humana.com

State Keywords: Kentucky
Industry Keywords: health, health of other professional services, insurance
Source: Humana Inc.

Copyright © 2009 Business Wire Business Editors / Health / Medical Writers LOUISVILLE, Ky. - - February 23, 2009 - Friday 20 February 2009, the stock after the market close, the Centers for Medicare and Medicaid Services has announced preliminary 2010 Medicare Advantage payment rates.