Humana 2008 Annual Report Download - page 49

Medical membership was as follows at December 31, 2008 and 2007:
2008 2007
Change
Members Percentage
Government segment medical members:
Medicare Advantage ............................. 1,435,900 1,143,000 292,900 25.6%
Medicare stand-alone PDP ......................... 3,066,600 3,442,000 (375,400) (10.9)%
Total Medicare .............................. 4,502,500 4,585,000 (82,500) (1.8)%
Military services ................................ 1,736,400 1,719,100 17,300 1.0%
Military services ASO ............................ 1,228,300 1,146,800 81,500 7.1%
Total military services ........................ 2,964,700 2,865,900 98,800 3.4%
Medicaid ...................................... 385,400 384,400 1,000 0.3%
Medicaid ASO .................................. 85,700 180,600 (94,900) (52.5)%
Total Medicaid .............................. 471,100 565,000 (93,900) (16.6)%
Total Government ........................... 7,938,300 8,015,900 (77,600) (1.0)%
Commercial segment medical members:
Fully-insured ................................... 1,978,800 1,808,600 170,200 9.4%
ASO .......................................... 1,642,000 1,643,000 (1,000) (0.1)%
Total Commercial ........................... 3,620,800 3,451,600 169,200 4.9%
Total medical membership ............................ 11,559,100 11,467,500 91,600 0.8%
These tables of financial data should be reviewed in connection with the discussion that follows.
Summary
Net income was $647.2 million, or $3.83 per diluted common share, in 2008 compared to $833.7 million, or
$4.91 per diluted common share, in 2007. The year-over-year decline primarily reflects lower operating earnings
in our Government segment as a result of higher expenses associated with our Medicare stand-alone PDP
products and lower net investment income primarily due to other-than-temporary impairments in our investment
portfolios of $65.3 million, or $0.39 per diluted common share.
Premium Revenues and Medical Membership
Premium revenues increased $3.7 billion, or 14.9%, to $28.1 billion for 2008, compared to $24.4 billion for
2007 primarily due to higher premium revenues in both the Government and Commercial segments. Premium
revenues reflect changes in membership and increases in average per member premiums. Items impacting
average per member premiums include changes in premium rates as well as changes in the geographic mix of
membership, the mix of product offerings, and the mix of benefit plans selected by our membership.
Government segment premium revenues increased $2.8 billion, or 15.0%, to $21.0 billion for 2008
compared to $18.2 billion for 2007 primarily attributable to higher average Medicare Advantage membership and
an increase in per member premiums partially offset by a decrease in our Medicare stand-alone PDP
membership. Average membership is calculated by summing the ending membership for each month in a period
and dividing the result by the number of months in a period. Average Medicare Advantage membership increased
18.7% in 2008 compared to 2007. Sales of our PPO and PFFS products drove the majority of the 292,900
increase in Medicare Advantage members since December 31, 2007. The Cariten, OSF, SecureHorizons, and
Metcare acquisitions also added 94,900 Medicare HMO and PPO members. Medicare Advantage per member
premiums increased 3.9% during 2008 compared to 2007. Medicare stand-alone PDP premium revenues
decreased 7.9% during the 2008 period compared to the 2007 period, primarily due to a 375,400, or 10.9%,
decrease in PDP membership since December 31, 2007.
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