Humana is holding off on projecting its future earnings for 2017 until it learns more about its merger with Aetna, according to the insurer in releasing its 2016 financial report on Wednesday.
On Jan. 23, a federal court ruled against Aetna's proposed $37 billion merger with Humana. Aetna, which has said it is considering appealing the ruling, is expected to release a decision by February 15.
Humana said it would hold a call with investors that provides an update on the transaction with Aetna no later than Feb. 16.
"This time frame allows Humana to fully evaluate the court's decision and any related impact on its expected results for 2017," Humana said.
Aetna and Humana have a merger deadline of mid-February. If the deal is not done by then, Aetna will owe Humana a $1 billion breakup fee.
[Also: Aetna will not reenter ACA markets, still debating appeal for merger block]
The Department of Justice blocked the merger, and the court ruled against it on antitrust grounds and competitive concerns for the Medicare and Medicare Advantage market.
Humana is among the nation's biggest insurers of Medicare Advantage.
While the company delayed projections, it did report a profit for 2016 of $2.8 billion, versus $2.4 billion in 2015.
Humana reported a $486 million loss for the fourth quarter, compared to a $246 million gain for the same period in 2015.
Decreases were due to a $583 million reduction in premiums related to the write-off of federal risk corridor payments that were not fully funded.
Humana also suffered premium losses from losing a large group Medicare account that moved to a private exchange on January 1, 2016, and from having fewer individual commercial members.
Increase was primarily driven by higher average membership and premium increases for certain lines of business.
Operating results for the company's individual Medicare Advantage business were ahead of the company's original expectations primarily due to lower-than-projected utilization, Humana said.
[Also: CMS pitches modest increase in 2018 Medicare Advantage rates]
"Our individual Medicare Advantage and Healthcare Services businesses improved significantly year over year and our cash flow from operations more than doubled," said Brian A. Kane, senior vice president and CFO. "We have entered 2017 with a solid balance sheet and keen operational focus, positioning us well for the future."
Humana said in the financial statement that it has filed for reconsideration of star ratings measures related to membership in four-star plans. The Centers for Medicare and Medicaid Services is currently accepting comments on its preliminary 2018 Medicare Advantage and Part D payment rates and proposed policy changes given in its Feb. 1 advance notice.
The most recent star quality ratings show a significant decline in the percent of Humana members expected to be in four-star rated plans or above, the company said. Humana said it does not believe that its star ratings for the 2018 bonus year accurately reflect the company's performance.
In the advance notice, CMS estimates Medicare Advantage plans will, on average, experience a 0.25 percent increase in funding. It would be a 0.65 percent increase without the negative impact associated with star quality bonuses, which affect not only Humana but the entire sector, the insurer said.
Also in its financial statement, Humana announced James E. Murray, executive vice president and chief operating officer, will retire on March 31 and will not be replaced.
Murray, who joined Humana in 1989, has agreed to serve as an advisor to the company through the end of the year. At this time, the company does not anticipate filling the chief operating officer role, Humana said.
In the Affordable Care Act market in 2016, the company offered on-exchange coverage in 15 states. For 2017, the company is offering on-exchange individual commercial health plans in 11 states. The company had limited on-exchange membership in the four states where it discontinued that coverage in 2017.
Humana also discontinued substantially all ACA-compliant off-exchange individual commercial plans effective Jan. 1.
Twitter: @SusanJMorse