Humana reports 21 percent drop in 1Q profit

Humana Inc. said Monday that its first-quarter profit fell 21 percent as the health insurer paid out more in claims and beefed up spending to handle expected growth in its lucrative Medicare Advantage membership. The company, based in Louisville, nudged up its earnings expectations for the full year to a range of $7.55 to $7.75 per share, up from its prior forecast of $7.50 to $7.70 per share. But the first-quarter results and the increased forecast were short of Wall Street expectations. In essence, Humana set aside more money in previous quarters than was needed to pay claims during a slowdown in the use of health care services by consumers who felt pinched during the recession.