Humana posts lower 4th-quarter net income

Published on NewsOK Modified: February 4, 2013 at 10:32 am •  Published: February 4, 2013
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Last year, Humana acquired Metropolitan Health Networks Inc. in a deal aimed at strengthening its Medicare Advantage business, a government-subsidized comprehensive health insurance for seniors.

Metropolitan Health coordinates medical care for Medicare Advantage and Medicaid recipients.

In another late-year deal, Humana acquired Certify Data Systems, which through its health information exchange technology connects health care providers so they can share patient health information.

Humana also hired more clinical care nurses and stepped up efforts to closely monitor the health status of its new Medicare members.

"We expect that these investments will benefit us significantly over the long term, both in competitive positioning and profitability," Bloem said.

Humana's membership in its individual Medicare Advantage business reached 1.93 million at the end of 2012, up 18 percent from a year ago. That growth continued in January, when the membership surpassed 2 million, up about 83,400 from the end of 2012. Humana CEO Bruce D. Broussard predicted net membership growth of 100,000 to 120,000 in 2013.

Those plans offer privately run, government-subsidized health insurance for seniors with extras like vision or dental coverage in addition to basic Medicare coverage.

Membership in Humana's individual stand-alone Medicare prescription drug plans rose 18 percent to nearly 3 million members at year's end. Humana promotes its Medicare prescription drug offerings and other plans at Wal-Mart stores. Humana expects enrollment net growth of 135,000 to 175,000 members in those prescription plans this year, Broussard said.

Humana reported fourth-quarter pretax income of $256 million in its retail division, compared with $326 million a year earlier. The drop was due to the higher claims payments. For the full year, pretax earnings fell by $425 million from the prior year.

Humana's employer group segment had a pretax loss of $25 million in the fourth quarter, an improvement from a pretax loss of $51 million a year ago. Its health and well-being services segment posted pretax income of $75 million in the fourth quarter, down $10 million from a year ago, mainly because of transaction costs associated with a couple of acquisitions.