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Humana sees 2014 Medicare Advantage, exchange customer growth

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[May 07, 2014]   (Reuters) Managed care company Humana Inc said on Wednesday that it expects to add more customers to its Medicare Advantage plans in 2014 despite government cuts to funding and that its individual business will grow through new Obamacare plans.

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)

[ 2014 Thomson Reuters. All rights reserved.]

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