AM Best Affirms Credit Ratings of Humana Inc. and Its Health Insurance Subsidiaries

AM Best has secured a Financial Strength Rating (FSR) of A- (Excellent) and a Long-Term Credit Rating (ICR) of “a-” (Good) for most health and dental insurance companies man inc. (Humana) (Headquarters at Louisville, KY) [NYSE: HUM]. These subsidiaries are collectively referred to as Humana Health Group Company Profile. Similarly, AM Best has affirmed a Long-Term ICR of “bbb-” (Good) and a Long-Term Rating (Long-Term IRs) of man inc. AM Best has reaffirmed the Short-Term Issue Credit Rating (Short-Term IR) of AMB-2 (Satisfactory) for man inc. In addition, AM Best has affirmed an FSR of B++ (Good) and a Long-Term ICR of “bbb” (Good) for the following Humana entities: Humana Insurance of Puerto Rico, Inc. and Humana Health Plans of Puerto Rico, Inc. These companies are leading Puerto Rico and together they are referred to as Humana Health about The Puerto Rican community. The loan format (parts) is fixed. (See below for more information on Humana Health Group Company Profile members and Long Term IRSs.)

The ratings reflect the strength of Humana Health Group’s balance sheet, which AM Best considers to be adequate, as well as its operational efficiency, sound business history and corporate governance (ERM).

Humana Health Group’s opinion over the past few years is due to the number of shares issued by this company. The company’s performance has continued to be good; however, earnings declined in 2021 based on increased medical spending and risk reduction costs in its core Medicare Advantage business. AM Best says earnings were boosted in 2020 from the suspension of unnecessary care due to COVID. Risk-adjusted income for Humana Health Group’s Medicare Advantage business declined in 2021 due to a lack of claims and meeting notices in 2020, which led to a significant decrease in visits by seniors. Hospital spending returned to normal levels in 2021 along with increased hospital spending on COVID testing and treatment. The performance of the first half of 2022 has improved with top line growth and margins being reported historically.

Humana has a strong national business reputation and is the second largest Medicare Advantage insurer in the U.S. United States. The company is also expanding its presence in Managed Medicaid and now works with six states. Business diversity is provided through Humana’s TRICARE military partnership providing medical care to more than 6 million people. The organization is also expanding its non-healthcare business to create an integrated care delivery model, including pharmacies, providers and home health care. Humana has a robust ERM program that proactively monitors current and emerging risks.

Financial flexibility is provided by the holding company, Humana, which includes funds and a $4 billion commercial paper program supported by its credit union. In addition, the organization has access to short-term loans from Federal Home Loan Bank of Cincinnati through its subsidiary, Humana Insurance Company. Equity in the holding company was raised based on the acquisition of Kindred at Home in 2021 and was approximately 45% at the end of the second quarter of 2022. 60% shares in Kindred At Home’s medical services, which are expected to be used to pay off the remaining debt. It is expected that profitability will be around 40% by the end of 2022. Although Humana’s assets have increased due to the purchase of Kindred at Home, its earnings before interest and taxes (EBIT) margin has remained strong at more than 10 times.

Votes a Humana Health about The Puerto Rican community showing its site strength, which AM Best considers to be adequate, as well as its slow operation, limited business history, appropriate ERM and parent support, man inc.

Risk-adjusted capital of Humana Health about The Puerto Rican community has improved over the past two years based on revenue and a slight decline in enrollment. Total earnings in 2020 were raised due to unexpected maintenance. Margins were constrained in 2021 but remained good. In the past, operating results have been inconsistent depending on the complexity and cost of Medicare Advantage in the region. The parent company supports the operational and financial needs of its insurance companies in Puerto Rico and these organizations are included in Humana Inc.’s integrated ERM program.

FSR of A- (Good) and Long-term ICRs of “a-” (Good) have been determined by the standard recommendations of the following health and dental insurance companies. man inc.:

  • Humana Insurance Company
  • Company Opinion Humana Medical Plan, Inc.
  • Company Opinion Humana Health Plan, Inc.
  • Humana Health Benefit Plan of Louisiana, Inc.
  • Humana Health Plan of Texas, Inc.
  • Humana Health Insurance Company of Florida, Inc.
  • Humana Benefit Plan of Illinois, Inc.
  • Humana Health Plan of Ohio, Inc.
  • Humana Employers Health Plan of Georgia, Inc.
  • Humana Insurance Company of New York
  • Humana Wisconsin Health Organization Insurance Corporation
  • Humana Insurance Company of Kentucky
  • Cariten Health Plan Inc.

  • Company Overview CarePlus Health Plans, Inc.
  • HumanaDental Insurance Company
  • CompBenefits Insurance Company
  • CompBenefits Company
  • Company Overview CompBenefits Dental, Inc.
  • The opinion of the company Dental Concern, Inc.
  • Company Profile DentiCare, Inc.

The following Long-Term IRs have been determined with a fixed point of view:

Opinions of the company Humana Inc.

— “bbb-“(Good) on $600 million 3.15% senior unsecured notes, due 2022

— “bbb-” (Good) on $400 million 2.9% unsecured senior notes, due 2022

— “bbb-” (Good) on $1.5 billion 0.65% senior unsecured notes, due 2023

— “bbb-” (Good) on $600 million 3.85% senior unsecured notes, due 2024

— “bbb-” (Good) on $600 million 4.5% senior unsecured notes, due 2025

— “bbb-” (Good) on $750 million 1.35% senior unsecured notes, due 2027

— “bbb-” (Good) on $600 million 3.95% senior unsecured notes, due 2027

— “bbb-” (Good) on $500 million 3.125% senior unsecured notes, due 2029

— “bbb-” (Good) on $750 million 3.7% unsecured senior notes, due 2029

— “bbb-” (Good) on $500 million 4.875% senior unsecured notes, due 2030

— “bbb-” (Good) on $750 million 2.15% senior unsecured notes, due 2032

— “bbb-” (Good) on $250 million 8.15% senior unsecured notes, due 2038

— “bbb-” (Good) on $400 million 4.625% senior unsecured notes, due 2042

— “bbb-” (Good) on $750 million 4.95% senior unsecured notes, due 2044

— “bbb-” (Good) on $400 million 4.8% unsecured high notes, due 2047

— “bbb-” (Good) on $500 million 3.95% senior unsecured notes, due 2049

The following long-term effects of IR have been proven to be shelf stable.


Opinions of the company Humana Inc.

– “bbb-” (Good) for senior unsecured debt securities

– “bb+” (Fair) for subprime loans

– “bb” (Fair) for preferred stock

This article relates to the Credit Ratings published on the AM Best website. For all information related to the release and relevant disclosures, including office details responsible for all ratings mentioned in this magazine, please see AM Best’s Recent Actions Web page. For more information on the application and limitations of the Credit Rating concept, please see Best’s Credit Ratings Guide. For more information on the appropriate use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best’s social media, please see Tips for Effectively Using Quality Scores & Tests.

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Source: AM Best