Humana 2004 Annual Report Download - page 38

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Comparison of Results of Operations for 2004 and 2003
Certain financial data for our two segments was as follows for the years ended December 31, 2004 and
2003:
Change
2004 2003 Dollars Percentage
(in thousands, except ratios)
Premium revenues:
Fully insured ......................................... $ 6,614,482 $ 6,240,806 $ 373,676 6.0%
Specialty ............................................ 349,564 320,206 29,358 9.2%
Total Commercial ................................. 6,964,046 6,561,012 403,034 6.1%
Medicare Advantage ................................... 3,086,598 2,527,446 559,152 22.1%
TRICARE ........................................... 2,127,595 2,249,725 (122,130) (5.4)%
Medicaid ............................................ 511,193 487,100 24,093 4.9%
Total Government ................................. 5,725,386 5,264,271 461,115 8.8%
Total ....................................... $12,689,432 $11,825,283 $ 864,149 7.3%
Administrative services fees:
Commercial .......................................... $ 166,032 $ 122,846 $ 43,186 35.2%
Government ......................................... 106,764 148,830 (42,066) (28.3)%
Total ........................................... $ 272,796 $ 271,676 $ 1,120 0.4%
Income before income taxes:
Commercial .......................................... $ 142,010 $ 121,010 $ 21,000 17.4%
Government ......................................... 273,840 223,706 50,134 22.4%
Total ........................................... $ 415,850 $ 344,716 $ 71,134 20.6%
Medical expense ratios (a):
Commercial .......................................... 83.9% 82.9% 1.0
Government ......................................... 84.3% 84.3% —
Total ........................................... 84.1% 83.5% 0.6
SG&A expense ratios (b):
Commercial .......................................... 16.4% 16.9% (0.5)
Government ......................................... 12.2% 13.4% (1.2)
Total ........................................... 14.5% 15.4% (0.9)
(a) Represents total medical expenses as a percentage of premium revenue. Also known as MER.
(b) Represents total selling, general, and administrative expenses as a percentage of premium revenues and administrative services fees. Also
known as the SG&A expense ratio.
Medical membership was as follows at December 31, 2004 and 2003:
Change
2004 2003 Members Percentage
Commercial segment medical members:
Fully insured .............................................. 2,286,500 2,352,800 (66,300) (2.8)%
ASO .................................................... 1,018,600 712,400 306,200 43.0%
Total Commercial ...................................... 3,305,100 3,065,200 239,900 7.8%
Government segment medical members:
Medicare Advantage ........................................ 377,200 328,600 48,600 14.8%
Medicaid ................................................. 478,600 468,900 9,700 2.1%
TRICARE ................................................ 1,789,400 1,849,700 (60,300) (3.3)%
TRICARE ASO ........................................... 1,082,400 1,057,200 25,200 2.4%
Total Government ...................................... 3,727,600 3,704,400 23,200 0.6%
Total medical membership ....................................... 7,032,700 6,769,600 263,100 3.9%
This table of financial data should be reviewed in connection with the discussion on the following pages.
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