In an effort to jointly deliver innovative solutions to federal
and state governments,
Humana Inc.
(
HUM
), on Wednesday, announced an alliance with CareSource, a
non-profit health plan. The alliance was aimed at providing
superior health care to Medicare, Medicaid and dual-eligible
beneficiaries.
The financial terms of the deal were not divulged. However, the
two companies will have an exclusive relationship in the states
where they will work together.
The alliance aspires to profit from the cumulative experience of
Humana and CareSource. While the former has over 25 years of
experience in Medicare, the latter is proficient in the Medicaid
business, with about 23 years of experience. Thus, together the two
companies will be able to share each others' knowledge and
experience to provide superior quality service to
policyholders.
CareSource is one of the largest Medicaid health plan in the
U.S. with over 900,000 enrollees. However, most of its
policyholders are located in Ohio, making it the largest Medicaid
company in the state. On the other hand, Humana's 5 million
Medicare members are spread all over the U.S.
Humana has a strong Medicare business, which is further expanded
through several joint ventures. The Medicare Part D PDP plan
launched in collaboration with the Wal-Mart Stores in October 2010
expanded the company's individual Medicare stand-alone PDP
membership by 52.1% to 2.54 million at 2011-end, compared with 1.67
million at 2010-end.
Moreover, both the Humana Walmart-PDP and Humana's alliance with
CNO Financial Group Inc.
's (
CNO
) subsidiary Bankers Life and Casualty Company to offer Humana
Medicare products will enhance the company's membership in
prescription coverage plans and mail-order drug business.
Humana is already the fifth-largest health insurer on enrollment
basis while the first and the second positions are occupied by
WellPoint Inc.
(
WLP
) and
UnitedHealth Group Inc.
(
UNH
), respectively.
The Zacks Consensus Estimate for Humana's first-quarter 2012
earnings is currently pegged at $1.50 per share, down 3.2% from the
year-ago quarter. Nevertheless, for full-year 2012, the Zacks
Consensus Estimate stands at $7.79 per share, down 0.4% from
2011.
The company currently carries a Zacks #3 Rank, implying a
short-term 'Hold' rating. Considering the fundamentals, we maintain
our long-term 'Neutral' recommendation on the shares.
CNO FINL GRP (
CNO
): Free Stock Analysis Report
HUMANA INC NEW (
HUM
): Free Stock Analysis Report
UNITEDHEALTH GP (
UNH
): Free Stock Analysis Report
WELLPOINT INC (
WLP
): Free Stock Analysis Report
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