LOUISVILLE, Ky. (AP) — Health insurer Humana Inc.'s second-quarter net income fell by 18 percent as investments in health care exchanges and state-based contracts along with higher specialty drug costs more than offset continued membership growth in its Medicare Advantage and prescription drug plans.
The company's results, released Wednesday, matched analysts' expectations, and it reaffirmed its 2014 earnings estimate of between $7.25 and $7.75 per share.
Humana said membership in its individual Medicare Advantage business reached 2.36 million as of June 30, up 16.4 percent from a year ago and 14.2 percent higher than at the end of 2013.
The Louisville, Kentucky-based company is among the nation's largest providers of Medicare Advantage plans, which are privately run versions of the government's Medicare program for elderly and disabled people.
Membership in Humana's individual stand-alone Medicare prescription drug plans totaled nearly 3.89 million at the end of June, up 20.5 percent from a year ago and 18.6 percent higher than at the end of 2013. Humana promotes its Medicare prescription drug offerings and other plans at Wal-Mart stores.
The company's individual commercial medical membership increased to 1.12 million as of June 30, up 134.5 percent from a year ago.
"Our second-quarter and year-to-date results show the effectiveness of our integrated care delivery model in driving robust membership growth in our Medicare, health care exchange and state-based Medicaid businesses," Humana President and CEO Bruce D. Broussard said.
Costs associated with a new and expensive treatment for hepatitis C helped drive up specialty drug costs.
Overall, Humana reported net income of $344 million, or $2.19 per share, in the three months ending June 30. That's down from $420 million, or $2.63 per share, in the same quarter a year ago.
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