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Humana increases small-group enrollment

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Humana Inc. (NYSE:HUM) attracted more customers to its commercial individual health insurance programs and its fully insured commercial group medical insurance plans in the fourth quarter of 2012.

Humana ended the quarter providing or administering health coverage for 12 million people, up 8.1 percent from the total recorded a year earlier.

Enrollment in fully insured commercial plans rose 2.7 percent, to 1.2 million.

The number of individual commercial policies in force increased 2.4%, to 444 million.

Humana executives talked about the growth in the commercial health insurance operations in the company’s fourth-quarter earnings release, and also during a conference call the company held to discuss the latest results.

Humana is reporting $192 million in net income for the quarter on $9.6 billion in revenue, compared with $199 million in net income on $9.1 billion in revenue for the fourth quarter of 2011.

James Murray, Humana’s chief operating officer, said during the conference call that the company is pleased with the performance of its small group commercial insurance business.

“It continues to do well financially and grow,” Murray said.

Bruce Broussard, Humana’s chief executive officer, said the company believes the unit should continue to do well even after Jan. 1, 2014, when the Patient Protection and Affordable Care Act (PPACA) calls for government-run exchanges, or health insurance supermarkets, to start selling health insurance to individuals and small groups.

Some analysts have predicted that many small employers will drop health benefits in 2014 and send workers to get individual health insurance from the PPACA exchanges.

Humana believes that groups of professionals dominate its small group business, and that most of those groups will continue to offer group health benefits, Broussard said.

Also during the call:

- Murray predicted that Humana will participate in PPACA exchange programs in about 10 states.

- James Bloem, Humana’s chief financial officer, talked about the effects of the 2012-2013 flu season on claims costs.

The current flu season “is the most severe that Humana has experienced in at least a decade,” Bloem said.

The unexpected severity of the flu season probably led to about $75 million in extra claims costs from early December to mid-January, Bloem said.

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