Humana First Quarter Earnings Up, Stock Price Drops On Health Reform ‘Fears’
Reuters: "Health insurer Humana Inc (HUM.N) posted a higher-than-expected first-quarter profit on Monday, helped by increased enrollment in its Medicare plans for the elderly and operating cost controls. The large provider of Medicare plans also projected second-quarter profit well ahead of estimates."
"Humana is the second major health insurer to report results since Congress passed an overhaul of the health system. Last week, UnitedHealth Group Inc's (UNH.N) profit soared past Wall Street estimates, but fears that the new reform law will prevent such gains in the future undercut investor enthusiasm. Wall Street is especially concerned with the hit to profits next year from regulations that mandate the amount the insurers spend on medical costs" (Krauskopf, 4/26).
Marketwatch: Humana "said first-quarter net income rose 26% to $259 million, or $1.52 a share, from $206 million, or $1.22 a share" (Kennedy, 4/26).
The New York Times notes that "Shares of health insurer Humana Inc fell 4.3 percent to $43.56 over the fallout from the recently passed health reform law and on profit-taking" (4/26).
The Wall Street Journal: "Humana's medical-cost ratio, the percentage of premium revenue used to pay medical bills, declined to 83.4% from 83.9% year over year. ... [CEO Michael] McCallister said Humana hasn't yet changed any business practices to achieve upcoming minimum requirements for medical-cost ratios under the health-care overhaul. Regulators are working on the specifics of those regulations now. Chief Operating Officer James Murray said the company will have 'some issue' meeting the 80% minimum for individual plans" (Wisenberg Brin, 4/26).This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.