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Humana, whose first-quarter profit beat analyst
expectations but still fell as it spent more on marketing and
investments related to new products, said it will add 435,000
people this year to Medicare Advantage plans.
At the end of the first quarter, it had about 2.8 million people
in these plans, which are offered to seniors.
Humana, which had warned this year that government funding cuts
would negatively effect its business, said it still sees a
challenging year ahead because of government cuts to funding for
Medicare Advantage. It stuck by its outlook for earnings of
$7.25 to $7.75 per share, which it said has factored in
higher-than-expected costs for new Hepatitis C treatments.
These costs offset some lower medical services use during the
first quarter, it said.
The company said it had 715,600 individual plan members at the
end of March, an increase of 210,200 from the end of December.
That includes customers who bought plans on the new exchanges
created through President Barack Obama's healthcare reform law
and outside of those exchanges.
Profits during the quarter fell in part because of Medicare
Advantage and Obamacare exchange plan costs, it said, as well as
healthcare reform taxes and fees that raised the company's tax
rate.
The company reported net profit of $368 million, or $2.35 per
share, down from $473 million, or $2.95 per share a year
earlier. The year-earlier figure included a 41 cent-per-share
benefit from settling contract claims.
The company's earnings beat analyst expectations of $1.94 per
share, according to ThomsonReuters I/B/E/S.
(Reporting by Caroline Humer; Editing by W Simon and Sofina
Mirza-Reid)
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