NU Online News Service, July 30, 11:55 a.m. – Humana Inc., Louisville, Ky., is reporting $25 million in net income for the second quarter on $2.5 billion in revenue, compared with $19 million in net income on $2.7 billion in revenue for the second quarter of 2000.

Operating income, which excludes taxes and interest earnings, increased to $46 million, from $31 million.

Humana sells commercial health coverage to individuals and employers. It also sells coverage through Medicare, the TRICARE military health program, and other government programs.

Total major medical program enrollment rose 12%, to 6.5 million, as a result of expansion in the TRICARE unit.

Commercial enrollment fell 18%, to 2.9 million, because the company left unprofitable markets and gave up large, unprofitable accounts in some markets where it stayed, Humana says.

The average Humana major medical member generated $3.87 in net income for the second quarter and $384 in revenue, compared with $3.28 in net income and $467 in revenue for the second quarter of 2000.

Revenue per fully insured commercial member increased 12%, to $512.

The underlying cost of medical services appeared to be up about 9% to 10% from a year earlier for fully insured commercial customers, but up less than 4% for Medicare health maintenance organizations, Humana says.

Medicare HMO costs had been rising about 7% per year, but efforts to shut down unprofitable Medicare HMO operations appear to have succeeded at holding cost increases down, Humana says.