Updated from 6:53 a.m. EST

By Bruce Schreiner

LOUISVILLE, Ky. -- Health insurer Humana ( HUM) reported a 28% drop in fourth-quarter profit Monday, driven by higher claim expenses from its stand-alone Medicare prescription drug plans and a triple-digit plunge in earnings from its commercial business.

The company predicted a big turnaround in the next year, forecasting earnings per share in the range of $5.90 to $6.10, compared with earnings of $3.83 a share for the year just ended.

Humana earned nearly $174.1 million, or $1.03 a share, for the three months ended Dec. 31, compared with earnings of $243.2 million, or $1.43 a share, in the year-earlier period. The results came in below the consensus forecast by analysts surveyed by Thomson Reuters.

Revenue rose 18% to nearly $7.5 billion from $6.3 billion a year earlier.

For the full year, the company's net income was $647.2 million, down 22% from $833.7 million the previous year.

Humana's pretax income in its vast government segment dropped 12% to $267.3 million in the just-ended quarter, compared with $304.6 million a year ago. The decline was driven by previously announced lower operating results from its Medicare prescription drug plans and lower net investment income.

Humana said its Medicare Advantage membership grew to 1.4 million as of Dec. 31, up 26%, or 292,900 members, from the end of 2007. The Medicare Advantage plans offer comprehensive health coverage.

Membership in Humana's stand-alone prescription drug plans totaled nearly 3.07 million at the end of 2008, compared with 3.4 million members a year earlier.

Meanwhile, pretax earnings for Humana's commercial segment dropped to a loss of $6.3 million in the quarter, compared with a profit of $54.4 million a year earlier. The company said the decline was driven mainly by the impact of growth in high-deductible health plan membership along with a 37% decrease in net investment income.

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