For the three months ended June 30, Humana reported total revenue of approximately $12.22 billion, an increase of 18.4 percent from $10.32 billion in the second quarter of 2013. However, total operating expenses rose 19.8 percent year-over-year to about $11.54 billion.
Operating costs went up by 25.6 percent to $1.84 billion. The increase was driven by the non-deductible health insurance industry fee mandated by Patient Protection and Affordable Care Act, acquisition costs for new Medicare Advantage members, and investment spending on the health insurance exchanges and new state-based contracts, according to the insurer. The same factors drove operating costs up by 23.4 percent to $1.8 billion for Humana in the first quarter, which contributed to a 22.2 percent decline in net income during the first three months of this year.
For the six months ended June 30, Humana’s net income dropped by 20.3 percent year-over-year to $712 million. Revenues for the first six months of this year totaled $23.93 billion, up 15 percent from $20.81 billion during the first half of 2013. However, total operating expenses rose 16.4 percent year-over-year during the first six months of 2014 to $22.53 billion.
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