NU Online News Service, Nov. 1, 2004, 6:22 p.m. EST
Successful efforts to winnow out money-losing commercial accounts helped increase third-quarter profits at a large Midwestern managed care company.[@@]
Humana Inc., Louisville, Ky., is reporting $84 million in net income for the latest quarter on $3.2 billion in revenue, up from $62 million in net income on $3 billion in revenue for the third quarter of 2003.
The company insured or administered medical coverage for 6 million U.S. residents Sept. 30, down from 6.6 million a year earlier.
The drop in enrollment was the result of a national restructuring of the federal government’s TriCare military health coverage program. Humana’s share of TriCare program enrollment fell 35%, to 2.7 million.
But insured commercial membership held steady at about 2.3 million, and enrollment in the self-insured employer-sponsored plans that Humana administers increased 43%, to 1 million, Humana says.
Humana notes that it let “certain underperforming” plans that covered 94,000 members lapse during the third quarter, and it will be letting one fully insured commercial plan with 89,000 members lapse Jan. 1, 2005.
“This account had not been profitable for the company during 2004,” Humana says in its third-quarter earnings release.
The changes in Humana’s book of commercial business helped increase the commercial unit’s operating earnings 49%, to $39 million, Humana says.