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Humana reduces 2012 forecast as Medicare costs increase

Bloomberg BusinessWeek, August 1, 2012

Humana Inc., the second-biggest provider of Medicare benefits, fell the most in more than three years after cutting its 2012 profit forecast on higher-than- anticipated costs. Humana tumbled 13 percent to $61.60 at the close in New York, its biggest single-day decline since March 2009. Earnings this year may be $6.90 to $7.10 a share, the Louisville, Kentucky-based health plan said yesterday in a statement. That was below the $7.88 average of 10 analyst estimates compiled by Bloomberg. The company generated three-quarters of sales last year from Medicare, and Chief Executive Officer Michael B. McCallister said that new members were proving more expensive.