Humana 2005 Annual Report Download - page 46

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Comparison of Results of Operations for 2005 and 2004
Certain financial data for our two segments was as follows for the years ended December 31, 2005 and
2004:
Change
2005 2004 Dollars Percentage
(dollars in thousands)
Premium revenues:
Medicare Advantage .................................. $ 4,590,362 $ 3,086,598 $1,503,764 48.7%
TRICARE .......................................... 2,407,653 2,127,595 280,058 13.2%
Medicaid ........................................... 548,714 511,193 37,521 7.3%
Total Government ................................ 7,546,729 5,725,386 1,821,343 31.8%
Fully insured ........................................ 6,068,115 6,614,482 (546,367) (8.3)%
Specialty ........................................... 386,747 349,564 37,183 10.6%
Total Commercial ................................ 6,454,862 6,964,046 (509,184) (7.3)%
Total ...................................... $14,001,591 $12,689,432 $1,312,159 10.3%
Administrative services fees:
Government ......................................... $ 50,059 $ 106,764 $ (56,705) (53.1)%
Commercial ......................................... 209,378 166,032 43,346 26.1%
Total .......................................... $ 259,437 $ 272,796 $ (13,359) (4.9)%
Income before income taxes:
Government ......................................... $ 323,268 $ 273,840 $ 49,428 18.0%
Commercial ......................................... 98,446 142,010 (43,564) (30.7)%
Total .......................................... $ 421,714 $ 415,850 $ 5,864 1.4%
Medical expense ratios(a):
Government ......................................... 83.1% 84.3% (1.2)%
Commercial ......................................... 83.3% 83.9% (0.6)%
Total .......................................... 83.2% 84.1% (0.9)%
SG&A expense ratios(b):
Government ......................................... 12.6% 12.2% 0.4%
Commercial ......................................... 18.3% 16.4% 1.9%
Total .......................................... 15.3% 14.5% 0.8%
(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, 2005 and 2004:
Change
2005 2004 Members Percentage
Government segment medical members:
Medicare Advantage ........................................ 557,800 377,200 180,600 47.9%
Medicaid ................................................. 457,900 478,600 (20,700) (4.3)%
TRICARE ................................................ 1,750,900 1,789,400 (38,500) (2.2)%
TRICARE ASO ........................................... 1,138,200 1,082,400 55,800 5.2%
Total Government ...................................... 3,904,800 3,727,600 177,200 4.8%
Commercial segment medical members:
Fully insured .............................................. 1,999,800 2,286,500 (286,700) (12.5)%
ASO .................................................... 1,171,000 1,018,600 152,400 15.0%
Total Commercial ...................................... 3,170,800 3,305,100 (134,300) (4.1)%
Total medical membership ....................................... 7,075,600 7,032,700 42,900 0.6%
This table of financial data should be reviewed in connection with the discussion on the following pages.
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