(Un)Healthy Definition of 'Improvement"

Humana and other health insurers reported obese and obscene profits and profit gains. The principal driver behind these is the "improvement" in the benefit ratio - decreasing payments for benefits (numerator) and increasing premiums (denominator). An insurance company that only pays out (in benefits) 82% of what it collects in premiums, provides its executives a gross compensation, reduces headcount, and reports profits of $340 million for THREE MONTHS...

This type of capitalis begs the question "how much profit does one person extract from another's pain and suffering?"

Humana 2Q net income rises 21 percent on premiums - Yahoo! Finance: "...Humana said its lucrative Medicare Advantage business posted double-digit enrollment growth in the quarter. Medicare Advantage plans are government-sponsored, privately run programs for seniors that offer comprehensive health coverage.

Meanwhile, the company's second-quarter consolidated benefit ratio -- the percentage of premiums paid to cover medical claims -- also improved from a year ago.

The company earned $340.1 million, or $2 per share, up from $281.8 million, or $1.67 per share, a year ago. Revenue rose 9.5 percent to $8.65 billion from $7.9 billion..."

Humana Reports Second Quarter 2010 Financial Results - Yahoo! Finance: "...Benefit expenses – The impact of GAAP to non-GAAP(a) reconciliation items on the consolidated benefit ratio (benefit expenses as a percent of premium revenues) is detailed in the following table:

Consolidated Benefit Ratio � 2Q10 � 1H10
GAAP � 81.9% � 82.6%
Higher-than-expected favorable prior-year medical claims reserve development (c) � 0.4% � 0.9%
Higher-than-expected favorable 1Q10 medical claims reserve development (c) � 1.0% � -0-
Non-GAAP (a) � 83.3% � 83.5%
� �
The 2Q10 consolidated benefit ratio of 81.9 percent compares to 83.3 percent in 2Q09. On a non-GAAP(a) basis the 2Q10 consolidated benefit ratio of 83.3 percent was unchanged versus the 2Q09 consolidated benefit ratio. The non-GAAP(a) consolidated benefit ratio for 2Q10 reflected the combined impact of a 120 basis point increase in the non-GAAP(a) benefit ratio for the Government Segment and a 520 basis point improvement in the non-GAAP(a) benefit ratio for the Commercial Segment. The drivers of these changes are detailed in the segment discussions below....Premiums and administrative services fees:

Medicare Advantage premiums and administrative service fees of $4.89 billion in 2Q10 increased 18 percent compared to $4.15 billion in 2Q09, primarily due to an 18 percent increase in average Medicare Advantage membership year over year.
Medicare stand-alone PDP premiums of $700.2 million in 2Q10 increased 10 percent compared to $638.8 million in 2Q09, reflecting an 18 percent increase in premiums per member per month, partially offset by a 7 percent decline in average membership year over year.

Military services premiums and administrative services fees during 2Q10 decreased $38.7 million to $907.9 million compared to $946.6 million in 2Q09.""