Rising health insurance costs are having a noticeable effect on employers’ health coverage purchases at Humana Inc.
Humana, Louisville, Ky., is reporting $84 million in net income for the first quarter on $4.7 billion in revenue, compared with $107 million in net income on $3.3 billion in revenue for the first quarter of 2005.
One reason for the drop in net income is accounting issues related to the start of the new Medicare Part D prescription drug program, according to Humana.
Humana expects claims costs to average about 88% of revenue for the full year, but because of the way the contracts and reporting rules work, the actual ratio for the first quarter was about 96%, the company says.