We like to think that when we deposit a dollar at the bank, it goes into a big vault and we can pull out that same dollar at any time. But that¿s not how the U.S. banking system works. Banks take that money and invest it to make money themselves, so cash gets spread around. This, naturally, leads to a big risk: What happens if those investments go sour? Well, you¿d be out of luck. You can¿t get your dollar back.

The Federal Reserve doesn¿t like that scenario, so it prohibits banks from putting all the cash it has on deposit on the line. In fact, the Fed forces banks to keep a portion of their assets at the Federal Reserve itself, to make sure that some of your assets won¿t get squandered if the bank¿s bets go south. These are called ¿reserves,¿ (hence, Federal Reserve. Got it? Good), and usually amount to 10% of the total cash kept in checking accounts.

These reserves are never exactly 10%, and banks like to keep a little extra in reserve ¿ not, as you might think, to make you more comfortable that they¿re in good financial shape, but rather so they can take that excess and lend it to other banks and make money off it. (They¿re banks, they can¿t help themselves.) The rate at which they make these loans is called the Federal Funds rate, which is set by the Federal Reserve¿s Federal Open Market Committee.

When you hear people chattering about how the Fed cut or hiked interest rates, this is what they¿re talking about: the interest rate banks can charge for lending money from their reserves. This begs the question: If these are essentially loans between banks, why is the Fed Funds rate so important for the rest of the economy?

Well, simply put, because loans make the financial world go round. Bank A lends Bank B $10,000 at a Fed Funds rate of 5%. Bank B then lends out $10,000 to a small business at 7%. The small business then takes that money and expands the business and hires new workers. Now someone is employed, Bank B has made interest off the loan, and Bank A is the richer for making it all happen. It¿s perhaps overly simplistic, but you get the idea. When you want the economy to thrive, you make lending cheaper.

Of course, sometimes you don¿t want the economy to thrive. In fact, you might want it to cool down, mostly to avoid money flooding the system and causing inflation. In that case, the Fed raises interest rates, making it difficult to lend or borrow.

Home

Tuesday, August 05, 2008

CORRECTING and REPLACING Humana Announces 2009 Humana Preferred Network in Southeast Wisconsin, Exclusive Health Plan for Business Health Care Group

Email this Story | Respond to Editor | Print

Comtex

MILWAUKEE, Aug 05, 2008 (BUSINESS WIRE) ----Number in seventh graph, first sentence should read: 9 percent (sted 4.5 percent). Seventh graph, third sentence add (restated to 14 percent in 2007).

The corrected release reads:

HUMANA ANNOUNCES 2009 HUMANA PREFERRED NETWORK IN SOUTHEAST WISCONSIN, EXCLUSIVE HEALTH PLAN FOR BUSINESS HEALTH CARE GROUP

Broader network expands choices for consumer

Humana Inc. (NYSE: HUM) today announced details of the 2009 Humana Preferred network, available exclusively to the Business Health Care Group (BHCG) member companies. The Humana Preferred network includes many of the area's most efficient physicians and well-known hospitals. This is the first renewal in the three-year history of the BHCG - Humana relationship, marking the first network change since 2005.

The Humana Preferred network offers lower costs by including participating physicians who have shown the ability to guide members through treatment using resources most efficiently.

"We have expanded the presence of our 2009 Humana Preferred network, giving consumers more choices in more areas for a better overall health care experience. As a result of this process we are confident that this will help BHCG continue making progress of bringing health care costs closer to the Midwest average," said Kristine Seymour, president of Humana's Wisconsin commercial market operations.

Consumers can receive the highest level of benefits by selecting one of more than 4,500 physicians and 30 area hospitals participating in the Humana Preferred network. The most significant change was the addition of St. Nicholas in Sheboygan, Physicians Health Network and St. Joseph's in West Bend and the West Bend Clinic, which expands the network presence. The other health systems and provider groups that will continue to provide care to Humana Preferred network participants are as follows: Aurora HealthCare and Medical Groups, Beloit Hospital and Physician Group, Columbia St. Mary's Hospital and Physician Group, Children's Hospital and Medical Group, Fort Atkinson Hospital and Physicians, Froedtert and Community Memorial Hospital, Medical Associates, Medical College of Wisconsin, Mercy Health System, ProHealth Care, Watertown Hospital and Physician Group, United Hospital Systems and Medical Group.

Consumers using the Humana Preferred network will also have out-of-network coverage for non-participating health care providers. In addition to the Humana Preferred network, Humana will continue to provide a variety of care-management programs, including Humana's innovative Personal Nurse program, as well as online information to help consumers make educated health care buying decisions.

The expanded Humana Preferred network will be available exclusively to BHCG member companies for effective dates beginning January 1, 2009. Humana will next evaluate bids from hospitals and health systems in 2011 for inclusion in the network for 2012 - 2014. Humana will re-evaluate physicians twice each year and will make changes to the list of physicians included in Humana Preferred network on an annual basis.

Humana today also announced the 2007 cost results for BHCG self-funded member companies, reporting a 2-year aggregate decrease of 9 percent per health plan member when compared to 2005 base year costs. In 2007 the self-funded member companies experienced in aggregate a 6.1 percent increase in medical costs (prior to benefit application) which is approximately 4 percent less than the Milwaukee market trend. This result, coupled with the 13.7 percent reduction reported for 2006 (restated to 14% in 2007), produces a cumulative 2-year savings of $32 million for the self-funded member companies.

About Humana

Humana Inc., headquartered in Louisville, Kentucky, is one of the nation's largest publicly traded health benefits companies, with approximately 11.5 million medical members. Humana offers a diversified portfolio of health insurance products and related services - through traditional and consumer-choice plans - to employer groups, government-sponsored plans, and individuals.

Over its 47-year history, Humana has consistently seized opportunities to meet changing customer needs. Today, the company is a leader in consumer engagement, providing guidance that leads to lower costs and a better health plan experience throughout its diversified customer portfolio.

More information regarding Humana is available to investors via the Investor Relations page of the company's web site at http://www.humana.com, including copies of:

-- Annual reports to stockholders;

-- Securities and Exchange Commission filings;

-- Most recent investor conference presentations;

-- Quarterly earnings news releases;

-- Replays of most recent earnings release conference calls;

-- Calendar of events (includes upcoming earnings conference call dates and times, as well as planned interaction with research analysts and institutional investors);

-- Corporate Governance Information.

SOURCE: Humana Inc.

Humana Corporate Communications Amanda Dvorchak Harris, 312-441-5361
   advorchak@humana.com

Copyright Business Wire 2008 **********************************************************************
   As of Friday, 08-01-2008 23:59, the latest Comtex SmarTrend� Alert, an automated pattern recognition system, indicated an
   UPTREND on 07-23-2008 for HUM @ $43.04. For more information on SmarTrend, contact your market data provider or go to www.mysmartrend.com
   SmarTrend is a registered trademark of Comtex News Network, Inc. Copyright � 2004-2008 Comtex News Network, Inc. All rights
   reserved.