LOUISVILLE, Ky. — The health insurer Humana will stop providing employer-sponsored coverage as it focuses on bigger parts of its business, like Medicare Advantage.
The insurer said Thursday it will leave the employer-sponsored business over the next 18 to 24 months. That includes coverage provided through private companies and for federal government employees.
Employer-sponsored health insurance is one of the most common ways for Americans to get coverage, but it amounts to a small part of Humana’s enrollment. That is centered largely on Medicare Advantage, the privately run version of the federal government’s Medicare program for people age 65 and older.
Humana also will continue to provide coverage to nearly 6 million military service members and their families.
Humana also runs Medicaid coverage for states and provides stand-alone Medicare prescription drug coverage. The insurer covered about 13.5 million people last year, not counting the stand-alone prescription drug plans.
Employer-sponsored coverage made up around 7% of that total.
Humana CEO Bruce Broussard said in a prepared statement that the exit from employer-sponsored coverage lets Humana focus its “greatest opportunities for growth.”
The company also said its employer-sponsored business “was no longer positioned to sustainably meet the needs of commercial members over the long term or support the company’s long-term strategic plans.”
Enrollment growth in employer-sponsored insurance has stagnated for many years for insurers, including market leaders like UnitedHealthcare. Insurers have turned more to government-backed coverage like Medicare Advantage or managing state Medicaid coverage for enrollment growth.
They also have pushed deeper into managing prescription drug plans and buying care providers in order to control health care costs.
Humana does not expect that the changes will affect adjusted profits this year, which the company earlier this year projected to be at least $28 per share.
Analysts forecast $28.06 per share, according to FactSet.
Shares of Humana Inc., based in Louisville, Kentucky, climbed about $1 to $504.60 Thursday.
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