Humana just launched its answer to the new crop of insurer start-ups in the red-hot health plan market for seniors.
- Humana has launched a new venture called Author, which offers technology-driven health plans for seniors.
- Humana CEO Bruce Broussard said buzzy insurer startups like Clover Health prompted the new project.
- Author launched in South Carolina in 2021 and already has 15,000 members.
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About three or four years ago, Humana CEO Bruce Broussard realized that new, technology-focused health plans would soon be pushing into the health insurance market for seniors in a big way.
Buzzy startup insurers like Clover Health, which recently went public, and Devoted Health, and even clinics like Oak Street Health, were popping up and starting to make waves with their focus on convenience and using technology to provide better, holistic care to patients.
Humana's shareholders suddenly wanted the second-largest Medicare Advantage insurer to move faster into these areas, giving the insurer an opportunity to speed up investments in technology and transform itself.
Those startups "make us better, to be honest with you. They make us better because they're really encouraging us to innovate," Broussard said Friday in an interview with Insider.
So Humana went out and created its own internal "Clover" that Broussard said will compete with the insurer's core business. Humana hired a management team, put them in Boston, and told them to find out what the customers really want in a health plan, and to locate the best technology in the industry.
The result is a company called Author.
It's a "full-fledged Medicare company" that just launched this year, and it has already attracted 15,000 members, Broussard said.
Read more: Humana just made $643 million on its bet on a new way to pay for doctor's visits — and the CEO signaled that this is just the start
Author just launched, but Humana's already got big plans for it
Author offers multiple digital-driven health plans that — like startup Oscar Health — provide concierge-style support to plan members to help them navigate the healthcare system. It also boasts a contemporary, user-friendly technology platform.
"When you call Author, you're going to get somebody like a health coach as opposed to an insurance rep, and the operating processes and all those things are around 'how do we help you in navigating through the healthcare system?'" Broussard said. "It's much more concierge-oriented."
Author launched in South Carolina, but Broussard said Humana is already planning to expand it to other areas. Humana will also take what it learns from Author and apply it to other parts of its business, he said.
Staying dominant in a red-hot insurance market
Humana serves about 16.8 million members, including more than 4.7 million Medicare Advantage members. The insurer, which is based in Louisville, Kentucky, brings in annual revenue of nearly $65 billion.
Medicare Advantage is a private alternative to the traditional government-run Medicare program that provides health coverage to seniors, as well as younger people with disabilities or certain health conditions. It's growing rapidly as more people turn 65 everyday and become eligible for the program.
Lots of companies, incumbents and startups alike, have been clamoring for a bigger piece of the lucrative market.
Humana has long been a dominant Medicare Advantage insurer, and while Broussard said he doesn't see the newcomers as a threat, he does see them as encouraging Humana to learn some new tricks and bolster some of the assets Humana already had.
Humana is also drilling deeper into delivering healthcare and ensuring that patients can get care outside of the doctor's office.
The company has made big investments in primary care, as well as telehealth and providing care in the patient's home. Last year, in the midst of a global pandemic, Humana made a $100 million investment in telehealth startup Heal. It also invested in DispatchHealth, which provides on-demand advanced care in the home.
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