Humana earnings drop amid higher Obamacare costs - WDRB 41 Louisville News

Humana earnings drop amid higher Obamacare costs

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LOUISVILLE, Ky. (WDRB) --  Louisville-based Humana Inc.’s profits dropped 20 percent in the three-month ended in June compared to the same time a year earlier, but the insurer’s results still beat analysts’ expectations.

Humana said in a news release that all of its lines of business are performing well except for the individual commercial plans it sells directly to consumers and through government exchanges that are part of the Affordable Care Act.

Humana said its results were affected by having to set aside an additional $208 million in a “premium deficiency reserve” to cover losses on individual commercial plans, and that it plans to significantly scale back its individual business, including “Obamacare” exchange plans, in 2017.

The company will sell plans through the Obamacare exchanges in only 11 states in 2017, down from 15 currently, Humana said.

Humana’s pre-tax profit of $636 million – or $2.06 per share – was down 20 percent from a year earlier.

That’s partly because last year’s results included a $267 million gain on the sale of the company’s Concentra subsidiary, which closed in June 2015.

But Humana exceeded analysts’ expectations with adjusted earnings – which exclude things like the $61 million Humana has spent so far this year on its merger with Aetna – of $2.30 per share, according to Reuters.

Humana brought in revenue of $14 billion during the three-month period, up from $13.7 billion during the same time in 2015.

The company reaffirmed its prediction of earning at least $9.25 per share, which the company recently raised from $8.85.

Meanwhile, court proceedings are just getting underway this week as Humana plans to defend itself against a Justice Department lawsuit seeking to block its $37 billion acquisition by Connecticut-based Aetna.

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