Humana

Humana Inc. is a publicly traded American health insurance and healthcare-services company headquartered in Louisville, Kentucky. Founded in 1961 by lawyers David A. Jones Sr. and Wendell Cherry, the business initially operated nursing homes before moving into hospitals and, later, health insurance. Its corporate name became Humana in 1974, reflecting an effort to associate the company with a more personal and humane model of care. The company expanded rapidly during the 1970s and 1980s, including through the 1978 acquisition of American Medicorp. It became one of the largest hospital operators in the United States and developed a distinctive double-corridor hospital design intended to reduce the distance between patient rooms and nursing stations. As healthcare financing changed, Humana moved increasingly toward insurance. A lost hospital contract with a major health-maintenance organization helped motivate the development of an in-house insurance plan, marking a strategic shift away from hospital ownership. In the early 1990s, Humana separated its hospital operations from its insurance business. The hospital assets were placed into Galen Health Care, which was subsequently sold to Columbia Hospital Corporation of America in 1994. Humana thereafter concentrated on health benefits, government-sponsored coverage, and related services. Its portfolio has included Medicare Advantage, Medicare prescription-drug coverage, Medicaid, employer-sponsored products, military healthcare administration, pharmacy services, and care-management capabilities. Humana has periodically expanded beyond conventional insurance. It acquired Concentra in 2010, bringing urgent-care and physical-therapy operations into the company, although Concentra was sold in 2015. The company also invested in home health, hospice, and community-based care through Kindred at Home, acquired a majority interest in the business in 2021, and sold that interest to Clayton, Dubilier & Rice in 2022 while retaining a minority stake in the resulting home-health venture. Other moves included the acquisition of Enclara Healthcare and the creation of Humana Studio H, a digital-health and analytics division. The company is particularly identified with Medicare Advantage and has reduced its emphasis on employer-based commercial insurance. In 2023, Humana announced that it would exit the employer-based group commercial insurance market, reinforcing its focus on government programs and senior-oriented healthcare. Its other major activities include pharmacy-benefit and pharmacy-services operations, Medicaid participation, military health benefits administration through Humana Military, primary-care initiatives, and programs intended to support healthy behavior and population health. Humana has also been involved in public controversies concerning managed-care incentives, coverage decisions, Medicare communications, and alleged pharmaceutical price fixing. It has sponsored cultural, sporting, and senior-focused initiatives, including the Grand Ole Opry, the National Senior Games, the Humana Festival of New American Plays, and formerly the PGA Tour. Humana remains an active U.S. insurer whose identity is centered on Medicare, government-sponsored health benefits, and integrated care services rather than life insurance.

Humana began in 1961 when David A. Jones Sr. and Wendell Cherry established a nursing-home company. Known as Extendicare by 1968, the enterprise became the largest nursing-home operator in the United States. In 1972, the founders sold the nursing-home chain and used the proceeds to acquire hospitals, entering a sector then dominated by nonprofit institutions and emerging for-profit operators such as Hospital Corporation of America. The company adopted the Humana name in 1974. The change was intended to present the organization as a provider of more humane and personal care rather than as an operator that merely housed patients. Expansion continued through acquisitions, most notably the 1978 purchase of American Medicorp, which substantially increased the company’s scale. During the 1980s, Humana became one of the world’s largest hospital companies and developed a double-corridor hospital layout that placed support services between corridors and patient rooms, aiming to shorten staff travel distances. Humana’s transition toward insurance was driven by changes in the U.S. healthcare system. When one of its Arizona hospitals lost a contract with a major health-maintenance organization, the company created its own health plan. Insurance eventually became more strategically important than hospital ownership. By 1993, Humana operated 77 hospitals, but its executives separated the hospital and insurance activities. The hospital business became Galen Health Care, and in 1994 Columbia Hospital Corporation of America bought 73 Galen hospitals for approximately $3.4 billion. Humana remained independent after an unsuccessful 1998 acquisition attempt by UnitedHealthcare. In 2001, it helped establish Availity, a healthcare-information exchange platform. During the 2000s, the company developed wellness and population-health initiatives, including a 2005 partnership with Virgin Group and a 2006 collaboration with the Centers for Disease Control and Prevention. Humana also established Humana Military Healthcare Services in 1993 and began serving military beneficiaries under a TRICARE contract in 1996. The company returned to broader healthcare delivery in 2010 by acquiring Concentra, an operator of urgent-care and physical-therapy centers. Concentra was sold in 2015, with proceeds supporting capital allocation and a share-repurchase program. That same year, Aetna proposed acquiring Humana in a cash-and-stock transaction valued at roughly $37 billion. The U.S. Department of Justice challenged the deal as anticompetitive, and courts blocked it. The companies ended the transaction in 2017. Humana subsequently increased its emphasis on home-based and community care. In 2018 it acquired a 40 percent interest in Kindred at Home’s home-health, hospice, and community-care operations alongside private-equity partners. It also formed Humana Studio H to work on digital health and analytics. In 2019, Humana announced an agreement to acquire Enclara Healthcare. In 2021 it acquired a 60 percent stake in Kindred at Home, then agreed in 2022 to sell that interest to Clayton, Dubilier & Rice for approximately $2.8 billion while maintaining a minority position in the business. Humana’s modern strategy is centered on Medicare Advantage, Medicaid, military healthcare, pharmacy services, and care delivery for older adults. Its 2023 decision to exit employer-based commercial group insurance represented a further narrowing of strategic focus. The company continues to operate as a major U.S. health insurer and healthcare-services provider, with Medicare and government-sponsored coverage at the core of its brand and business model.

1. 2023Employer commercial group insurance exit announced

   Humana announced a strategic withdrawal from employer-based commercial group insurance.

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2. 2022Kindred at Home interest sold to Clayton, Dubilier & Rice

   Humana agreed to sell its majority interest in the home-care business while retaining a minority position.

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3. 2018Kindred at Home investment and Studio H launched

   Humana invested in Kindred at Home’s community-care operations and created a digital-health and analytics division.

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4. 2017Aetna transaction terminated

   The proposed merger was abandoned after federal courts blocked it on antitrust grounds.

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5. 2015Concentra sold and Aetna merger proposed

   Humana sold Concentra and entered into a proposed acquisition agreement with Aetna.

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6. 2010Concentra acquired

   Humana acquired the urgent-care and physical-therapy operator, expanding into direct healthcare services.

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7. 1994Galen hospitals sold

   Columbia Hospital Corporation of America acquired most of Galen’s hospitals for approximately $3.4 billion.

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8. 1993Hospital and insurance activities separated

   Humana spun its hospital operations into Galen Health Care while retaining the health-insurance business.

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9. 1978American Medicorp acquired

   The acquisition substantially increased Humana’s scale and supported its growth as a hospital operator.

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10. 1974Corporate name changed to Humana

    The company adopted the Humana name as it expanded from nursing homes into hospitals and sought to emphasize human-centered care.

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11. 1961Company founded as a nursing-home operator

    David A. Jones Sr. and Wendell Cherry established the business that became Humana, initially focusing on nursing homes.

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A large U.S. health insurer with a strong Medicare and government-program orientation, increasingly combining insurance with primary care, pharmacy, analytics, and home-based care services.

• Medicare AdvantageHealth insurance

  Humana’s Medicare Advantage business provides privately administered alternatives to Original Medicare for eligible U.S. beneficiaries. Plans generally combine hospital and medical coverage and may include prescription-drug benefits, provider networks, care coordination, supplemental benefits, and programs directed at older adults. Medicare Advantage has become the central insurance focus of the Humana brand.

• Medicare prescription drug plansPharmacy insurance

  Humana offers Medicare Part D prescription-drug coverage through standalone and plan-integrated products. These offerings use formularies, pharmacy networks, benefit structures, and medication-management services to help administer prescription coverage for Medicare members.

• Medicaid plansHealth insurance

  Humana participates in Medicaid markets through managed-care arrangements serving eligible low-income members. State-specific benefits and operating structures vary, but the business generally combines insurance administration with provider networks, care coordination, and member-support services.

• Humana MilitaryGovernment healthcare administration1993

  Humana Military Healthcare Services administers healthcare benefits for military personnel, retirees, and their families under Department of Defense TRICARE contracts. The business has served beneficiaries in regional managed-care programs and is associated with the TRICARE East region.

• Enclara HealthcarePharmacy services

  Enclara Healthcare is a pharmacy-services business acquired by Humana from Consonance Capital Partners and Enclara management. Its activities support prescription fulfillment and pharmacy-related services, complementing Humana’s insurance and medication-management capabilities.

• 2005Virgin Group healthy-behavior partnership

  United States

  Humana partnered with Virgin Group on member incentives intended to encourage exercise and other healthy behaviors.

  Outcome. Health-and-wellness partnership

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• 1979Humana Festival of New American Plays sponsorship

  United States

  Humana became a principal sponsor of the annual Louisville festival dedicated to new American theatrical works.

  Outcome. Long-running cultural sponsorship

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• Grand Ole Opry presenting sponsorship

  United States

  Humana has served as presenting sponsor of the Grand Ole Opry, linking the brand with a prominent American music institution.

  Outcome. Ongoing or unspecified sponsorship period

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• National Senior Games sponsorship

  United States

  Humana has sponsored the National Senior Games, supporting an event focused on active older adults.

  Outcome. Senior-health and community sponsorship

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• 2023Withdrawal from employer-based commercial group insuranceStrategy

  Humana increasingly prioritized Medicare, Medicaid, military healthcare, pharmacy, and care-delivery activities.

  What changed. The company announced that it would exit the employer-based commercial group insurance market.

  Aftermath. The decision reinforced Humana’s concentration on government-sponsored coverage and senior-focused healthcare.

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• 2018Investment in Kindred at HomeM&A

  Humana sought to expand its role in home-based, hospice, and community care alongside private-equity partners.

  What changed. Humana acquired a 40 percent stake in the relevant Kindred at Home operations for approximately $800 million.

  Aftermath. Humana later acquired a 60 percent interest in 2021 and agreed to sell that majority interest to Clayton, Dubilier & Rice in 2022.

  Initial investment. Approximately $800 million (2018)

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• 2015Agreement to be acquired by AetnaM&A

  Aetna proposed acquiring Humana in a cash-and-stock transaction valued at approximately $37 billion, combining two major U.S. health insurers.

  What changed. Humana entered the proposed transaction, subject to shareholder and regulatory approval.

  Aftermath. The U.S. Department of Justice challenged the deal, courts issued injunctions blocking it, and the companies terminated the agreement in 2017.

  Proposed transaction value. Approximately $37 billion (2015 announcement)

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• 2019Generic-drug price-fixing lawsuitControversy

  Humana filed litigation alleging that dozens of defendants participated in a far-reaching conspiracy to fix prices for generic drugs.

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• 2009Investigation into Medicare mailingsControversy

  The U.S. Department of Health and Human Services investigated Humana mailings to Medicare recipients that critics said could be mistaken for official government information and contained claims about healthcare reform. Regulators instructed the company to suspend the mailings while the matter was reviewed.

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• 1999Dispute over coverage of transplant treatmentControversy

  A television program produced by Michael Moore criticized Humana over the denial of treatment for a diabetic patient requiring a transplant. Following the public action, Humana changed its policy and authorized treatment, while later disputing aspects of the account.

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• 1996Congressional testimony on managed-care incentivesControversy

  Physician Linda Peeno, who had worked as a Humana contractor, testified before Congress about managed-care incentives and alleged that a coverage decision had been financially rewarded. Humana later disputed her characterization and employment status.

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• 2024Humana names Jim Rechtin president and chief executive officer

  Humana appointed Jim Rechtin as president and chief executive officer, succeeding Bruce Broussard and beginning a new leadership period for the company.

  Leadership change
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• 2023Humana announces exit from employer-based commercial group insurance

  Humana said it would leave the employer-based group commercial insurance market and concentrate more heavily on government-sponsored programs and related services.

  Other
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• 2022Humana receives TRICARE East managed-care contract

  The U.S. Department of Defense announced that Humana would receive the managed-care support contract for the TRICARE East region.

  Other
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• 2017Humana and Aetna abandon proposed combination after antitrust rulings

  The proposed acquisition of Humana by Aetna was terminated after federal courts blocked the transaction on competition grounds.

  M&ARegulation
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• 2017Humana and Aetna abandon proposed combination

  Humana and Aetna ended their proposed merger after a federal court blocked the transaction, following antitrust scrutiny of consolidation in the U.S. health-insurance market.

  M&ARegulation
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• 2015Humana and Cigna terminate proposed merger agreement

  Humana agreed to be acquired by Aetna rather than proceeding with a separate reported combination involving Cigna; the company’s merger activity reflected the consolidation pressures affecting U.S. insurers.

  M&A
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1. Humana
2. Humana official website
3. Humana names Jim Rechtin president and chief executive officer
4. Humana and Aetna abandon proposed combination