Humana on Monday announced that first-quarter revenue increased by 12% to $6.96 billion from $6.20 billion in the period last year, driven by higher-than-average enrollment in the company's Medicare Advantage plans, the Wall Street Journal reports.
The company also reported that first-quarter net income increased by 13% to $80.2 million, or 47 cents per share, from $71.2 million, or 42 cents per share, a year earlier (Kardos, Wall Street Journal, 4/28).
Analysts surveyed by Thomson Financial estimated higher first-quarter earnings of 45 cents per share on revenue of $6.94 billion (Schreiner, AP/San Francisco Chronicle, 4/28). The company in March estimated first-quarter earnings of between 44 cents and 46 cents per share as a result of higher-than-expected Medicare drug claims, but a lower effective tax rate helped overall profits (Wall Street Journal, 4/28). According to the AP/Chronicle, Humana's government segment, which includes Medicare and military health services, experienced a pretax loss of $3.2 million in the first-quarter, primarily because of $100 million in incremental expenses related to higher-than-expected claims in stand-alone Medicare drug plans. Those losses were offset by improved performance in MA plans and military services (AP/San Francisco Chronicle, 4/28).
The company also reported that its first-quarter medical-loss ratio declined to 86.7% from 86.8%, while the ratio in government plans increased by 0.7 percentage points to 90%, and its commercial segment experienced a 2.6-point drop to 76.8% because of two fourth-quarter acquisitions, the Journal reports. Overall plan membership increased by 0.7% to 11.4 million, and membership in dental and vision plans grew by more than three times to 6.9 million, from 1.9 million. Membership in MA plans increased by 14%, but membership in stand-alone drugs plans declined by 9.3% (Wall Street Journal, 4/22).