Humana, Louisville, Ky., more than doubled its fourth-quarter profit on dramatic growth in its Medicare business. Net income for the three months ended Dec. 31 reached $155 million, up nearly 151% from $61.8 million a year earlier. Revenue rose 54% to $5.66 billion from $3.66 billion the previous year.
For the full year, net income increased 64% to $487.4 million from $296.7 million in 2005. Full-year-revenue rose 49% to $21.42 billion from $14.42 billion the previous year, as total enrollment increased by 4.2 million members, or 59%, to 11.3 million members. Membership in Humanas Medicare Advantage health plans climbed 80% year-over-year to 1 million members, while enrollment in its standalone prescription-drug plans exceeded 3.5 million members by the end of 2006, the first year such plans were available.
The companys medical-expense ratio, or the percentage of premiums spent on medical bills, rose to 83.2% in the fourth quarter from 82.1% a year earlier, as higher ratios in its government business outweighed a decline in its commercial-segment ratio. Humana boosted its 2007 earnings forecast to between $4 and $4.20 per share, up from its previous estimate of $3.90 to $4.10 per share. In 2006, per-share earnings came to $2.90. The company also said it expects revenue to reach $24 billion to $26 billion in 2007. -- by Laura B. Benko