Humana reported some pretty sweet revenue for the second quarter of this year, despite losing a major military contract. The company's commercial plan earnings fell substantially, and membership dropped, but it more than made up for that with big increases in premiums for government clients.
Humana's revenue rose 7 percent during 2Q09, to $7.90 billion, from $7.35 billion 2Q08, while total premium and administrative service fees rose 8 percent compared with the same quarter last year. The premium increase and administrative services fees reflect growth in both average membership and per-member premiums for Medicare Advantage products.
At the same time, Humana managed to keep benefit expenses under control, at 83.3 percent of expenses, compared with 85 percent in 2Q08. That's a better medical expense ratio than many other large health plans have pulled off in recent times.
Commercial earnings fell 53 percent, to $35.3 million in 2Q09, compared with $75.6 million in 2Q08, largely due to lower investment income and lower income from Humana's small group business. Enrollment fell 5 percent from December 31, 2008 to June 30, 2009, from $3.62 million to $3.44 million.
The government segment, however, saw premiums of $4.15 billion in 2Q09, a 19 percent climb, versus $3.49 billion in 2Q09, largely due to a 13 percent jump in average Medicare Advantage membership. Medicare standalone premiums of $638.8 million in 2Q09 were down 29 percent from $905.1 million in 2Q08, reflecting a 35 percent fall in average membership year over year.
To learn more about Humana's earnings:
- read this press release
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