Humana 3Q Profit Jumps on Government Programs

FILE - In this April 30, 2006 file photo, the Main Street entrance of health benefits provider...

FILE - In this April 30, 2006 file photo, the Main Street entrance of health benefits provider Humana Inc., is seen at their headquarters in Louisville, Ky.Health insurer Humana Inc. rode its strong government business in posting a 65 percent jump in third-quarter profit Monday, Nov. 2, 2009, as bulging membership and premiums from Medicare Advantage overcame a lackluster commercial segment hampered by the weak economy.(AP Photo/Brian Bohannon, file)

(AP)

Health insurer Humana Inc. rode its strong government business in posting a 65 percent jump in third-quarter profit Monday, as bulging membership and premiums from Medicare Advantage overcame a lackluster commercial segment hampered by the weak economy.

Louisville-based Humana said its quarterly revenue rose 8 percent as enrollment in its Medicare Advantage offerings grew 11 percent from a year ago.

But the company saw enrollment in its plans sold to employers fall by 7.6 percent from a year ago, contributing to a pretax loss in its commercial segment during the three months.

Still, the commercial performance was "better than we modeled," Goldman Sachs analyst Matthew Borsch wrote to investors. And Humana predicts pretax income of about $120 million from the commercial segment in 2009.

Slumping enrollment in employer-sponsored health coverage plans has been a problem for several insurers as companies slash jobs and reduce the number of covered workers.

Shares of Humana fell 57 cents, or 1.5 percent, to close at $37.01 Monday.

The three largest publicly traded health insurers — UnitedHealth Group Inc., WellPoint Inc. and Aetna Inc. — all reported better-than-expected third-quarter results last month. But they also were bogged down by flu-related cost spikes. WellPoint and UnitedHealth also were hurt by declines in employer-sponsored insurance enrollment, something that is expected to continue into next year.

Cigna Corp., the last of the large health insurers, will report its third-quarter results Thursday.

Humana President and CEO Michael B. McCallister cited rising unemployment, market competition and swine flu as putting strains on his company's commercial business.

"The positive momentum in the government segment is offsetting the less-favorable results in the commercial segment," McCallister said in a conference call with industry analysts.