Despite strong membership growth in Humana's Medicare Advantage programs, the insurer's fourth-quarter net income fell 3.5 percent to $192 million as it paid out an increase in claims from the flu epidemic, according to the company's earnings report released Monday.
Humana spent $25 million in the fourth quarter of 2012 on flu-related medical costs, primarily driven by a "sharp increase in hospital admissions associated with respiratory diagnoses," Chief Financial Officer James Bloem said during a conference call with industry analysts, the Associated Press reported.
In fact, Bloem called the current flu season the "most severe that Humana has experienced in at least a decade," reported LifeHealthPro. In addition to the $25 million hit Humana took last quarter, Bloem said the company likely will face $50 million in flu costs this quarter.
Meanwhile, Humana successfully grew its small group commercial insurance business, increasing membership by 8.1 percent from the prior year to 12 million members. CEO Bruce Broussard said the small group unit should continue to perform well even when the health insurance exchanges begin enrolling consumers.