Humana's earnings fell 57 percent amid increased expenses, including acquisition-related costs, as it also saw medical claims costs rise. It reported a profit of $107.3 million, or 63 cents a share, down from $250.7 million, or $1.48 a share, a year earlier, according to the Wall Street Journal.
The insurer also said its net income dropped to $107.3 million, or 63 cents per share, for the fourth quarter, down from $250.7 million, or $1.48 per share, in 2009, according to ABC News.
Humana absorbed $1.02 per share of expenses in the fourth quarter that included more concentrated marketing costs due to a shortened Medicare Advantage enrollment period. Costs were also incurred from Humana's agreement to team with Wal-Mart last fall to offer a Medicare prescription drug plan.
Deriving about 60 percent of its premium revenue from its Medicare Advantage plans, Humana continued to see growth in that segment, despite changes mandated by health reform. The insurer said its Medicare Advantage enrollment ended January at nearly 1.9 million, which is up from 1.5 million at the end of 2009, reports Business First.
This 17 percent increase in average Medicare Advantage membership was partially offset by lower average stand-alone membership in its other Medicare segment and commercial fully insured group, notes the WSJ. Membership in Humana's stand-alone Medicare prescription drug plans reached nearly 2.4 million in January, up more than 630,000 members from the end of 2010.
Humana also reported its total medical membership edged down 0.4 percent to 10.2 million from a year earlier, but was up 117,600 from the third quarter. Its medical-loss ratio increased to 84 percent from 81 percent a year earlier, reports the WSJ.
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