Humana 3Q Profit Jumps On Government Programs

BRUCE SCHREINER

LOUISVILLE, Ky. (AP) — Health insurer Humana Inc. rode its strong government business in posting a 65 percent jump in third-quarter profit Monday, as bulging membership and premiums from Medicare Advantage overcame a lackluster commercial segment hampered by the weak economy.

Louisville-based Humana said its quarterly revenue rose 8 percent as enrollment in its Medicare Advantage offerings grew 11 percent from a year ago.

But the company saw enrollment in its plans sold to employers fall by 7.6 percent from a year ago, contributing to a pretax loss in its commercial segment during the three months.

Still, the commercial performance was "better than we modeled," Goldman Sachs analyst Matthew Borsch wrote to investors. And Humana predicts pretax income of about $120 million from the commercial segment in 2009.

Slumping enrollment in employer-sponsored health coverage plans has been a problem for several insurers as companies slash jobs and reduce the number of covered workers.

Shares of Humana fell 57 cents, or 1.5 percent, to close at $37.01 Monday.