Humana (HUM) 10-Q 3 Nov 09 2009 Q3 Quarterly report Financial data

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Thousands	9 Months Ended Sep. 30, 2009	9 Months Ended Dec. 31, 2008
Current assets:
Cash and cash equivalents	$1,452,006	$1,970,423
Investment securities	5,899,385	4,203,538
Receivables, less allowance for doubtful accounts of $48,071 in 2009 and $49,160 in 2008:
Premiums	765,039	777,672
Administrative services fees	11,489	12,010
Securities lending invested collateral	176,692	402,399
Other current assets	936,217	1,030,000
Total current assets	9,240,828	8,396,042
Property and equipment, net	679,010	711,492
Other assets:
Long-term investment securities	1,319,319	1,011,904
Goodwill	1,992,924	1,963,111
Other long-term assets	969,706	959,211
Total other assets	4,281,949	3,934,226
Total assets	14,201,787	13,041,760
Current liabilities:
Benefits payable	3,365,481	3,205,579
Trade accounts payable and accrued expenses	1,532,810	1,077,027
Book overdraft	199,384	224,542
Securities lending payable	189,774	438,699
Unearned revenues	219,789	238,098
Total current liabilities	5,507,238	5,183,945
Long-term debt	1,680,424	1,937,032
Future policy benefits payable	1,171,904	1,164,758
Other long-term liabilities	294,018	298,835
Total liabilities	8,653,584	8,584,570
Commitments and contingencies	-	-
Stockholders' equity:
Preferred stock, $1 par; 10,000,000 shares authorized; none issued	0	0
Common stock, $0.16 2/3 par; 300,000,000 shares authorized; 189,102,289 shares issued at September 30, 2009 and 187,856,684 shares issued at December 31, 2008	31,517	31,309
Capital in excess of par value	1,625,525	1,574,245
Retained earnings	4,178,952	3,389,936
Accumulated other comprehensive income (loss)	83,536	(175,243)
Treasury stock, at cost, 19,269,815 shares at September 30, 2009 and 19,031,229 shares at December 31, 2008	(371,327)	(363,057)
Total stockholders' equity	5,548,203	4,457,190
Total liabilities and stockholders' equity	$14,201,787	$13,041,760

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
In Thousands, except Share data	Sep. 30, 2009	Dec. 31, 2008
Receivables, allowance for doubtful accounts	$48,071	$49,160
Preferred stock, par	$1	$1
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, issued	0	0
Common stock, par	0.1667	0.1667
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	189,102,289	187,856,684
Treasury stock, shares	19,269,815	19,031,229

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Thousands, except Per Share data	3 Months Ended Sep. 30, 2009	3 Months Ended Sep. 30, 2008	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Revenues:
Premiums	$7,444,122	$6,991,569	$22,557,943	$20,810,922
Administrative services fees	133,732	114,401	368,308	339,344
Investment income (loss)	74,861	(16,773)	219,745	154,007
Other revenue	64,104	58,973	181,373	154,463
Total revenues	7,716,819	7,148,170	23,327,369	21,458,736
Operating expenses:
Benefits	6,111,351	5,810,613	18,748,206	17,667,129
Selling, general and administrative	1,047,773	979,223	3,115,918	2,845,709
Depreciation and amortization	62,088	56,126	180,580	160,542
Total operating expenses	7,221,212	6,845,962	22,044,704	20,673,380
Income from operations	495,607	302,208	1,282,665	785,356
Interest expense	26,259	19,348	79,605	53,554
Income before income taxes	469,348	282,860	1,203,060	731,802
Provision for income taxes	167,829	99,852	414,044	258,728
Net income	$301,519	$183,008	$789,016	$473,074
Basic earnings per common share	1.8	1.1	4.72	2.83
Diluted earnings per common share	1.78	1.09	4.67	2.79

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Thousands	9 Months Ended Sep. 30, 2009	9 Months Ended Sep. 30, 2008
Cash flows from operating activities
Net income	$789,016	$473,074
Adjustments to reconcile net income to net cash provided by operating activities:
Net realized capital (gains) losses	(13,734)	73,436
Stock-based compensation	48,818	41,835
Depreciation and amortization	180,580	160,542
Benefit for deferred income taxes	(22,753)	(21,411)
Changes in operating assets and liabilities, net of effect of businesses acquired:
Receivables	6,247	(93,320)
Other assets	11,718	(166,931)
Benefits payable	159,902	337,632
Other liabilities	(10,681)	(124,368)
Unearned revenues	(18,309)	(9,098)
Other, net	16,687	14,346
Net cash provided by operating activities	1,147,491	685,737
Cash flows from investing activities
Acquisitions, net of cash acquired	(12,436)	(262,347)
Purchases of property and equipment	(122,135)	(179,545)
Purchases of investment securities	(5,290,819)	(5,082,141)
Maturities of investment securities	802,331	418,563
Proceeds from sales of investment securities	2,903,936	4,111,640
Change in securities lending collateral	248,925	801,518
Net cash used in investing activities	(1,470,198)	(192,312)
Cash flows from financing activities
Receipts from CMS contract deposits	1,534,629	1,774,381
Withdrawals from CMS contract deposits	(1,204,536)	(1,807,952)
Borrowings under credit agreement	0	425,000
Repayments under credit agreement	(250,000)	(1,225,000)
Proceeds from issuance of senior notes	0	749,247
Debt issue costs	0	(6,662)
Change in securities lending payable	(248,925)	(801,518)
Common stock repurchases	(8,270)	(105,767)
Change in book overdraft	(25,158)	(11,546)
Excess tax benefit from stock-based compensation	1,717	9,794
Proceeds from stock option exercises and other	4,833	9,045
Net cash used in financing activities	(195,710)	(990,978)
Decrease in cash and cash equivalents	(518,417)	(497,553)
Cash and cash equivalents at beginning of period	1,970,423	2,040,453
Cash and cash equivalents at end of period	1,452,006	1,542,900
Supplemental cash flow disclosures:
Interest payments	67,175	41,340
Income tax payments, net	$478,051	$234,383

1. BASIS OF PRESENTATION

1. BASIS OF PRESENTATION
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
1. BASIS OF PRESENTATION	1. BASIS OF PRESENTATION The accompanying condensed consolidated financial statements are presented in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the disclosures normally required by accounting principles generally accepted in the United States of America, or those normally made in an Annual Report on Form 10-K. For further information, the reader of this Form 10-Q should refer to our Form 10-K for the year ended December31, 2008, that was filed with the Securities and Exchange Commission, or the SEC, on February20, 2009. References throughout this document to we, us, our, Company, and Humana mean Humana Inc. and its subsidiaries. The preparation of our condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The areas involving the most significant use of estimates are the estimation of benefits payable, the impact of risk sharing provisions related to our Medicare and TRICARE contracts, the valuation and related impairment recognition of investment securities, and the valuation and related impairment recognition of long-lived assets, including goodwill. These estimates are based on knowledge of current events and anticipated future events, and accordingly, actual results may ultimately differ materially from those estimates. Refer to Note 2 to the consolidated financial statements included in our Form 10-K for the year ended December31, 2008 for information on accounting policies that the Company considers in preparing its consolidated financial statements. The financial information has been prepared in accordance with our customary accounting practices and has not been audited. In managements opinion, the information presented reflects all adjustments necessary for a fair statement of interim results. All such adjustments are of a normal and recurring nature. We have evaluated subsequent events for recognition or disclosure through November3, 2009, the date these condensed consolidated financial statements were issued.

2. RECENTLY ISSUED ACCOUNTING P

2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS	2. RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Financial Instruments In April 2009, the Financial Accounting Standards Board, or the FASB, issued new guidance to address concerns about (1)measuring the fair value of financial instruments when the markets become inactive and quoted prices may reflect distressed transactions and (2)recording impairment charges on investments in debt securities. The FASB also issued guidance to require disclosures of fair values of certain financial instruments in interim financial statements to provide financial statement users with more timely information about the effects of current market conditions on their financial instruments. The new guidance highlights and expands on the factors that should be considered in estimating fair value when the volume and level of activity for a financial asset or liability has significantly decreased and requires new disclosures relating to fair value measurement inputs and valuation techniques (including changes in inputs and valuation techniques). In addition, new guidance regarding recognition and presentation of other-than-temporary impairments changed (1)the trigger for determining whether an other-than-temporary impairment exists and (2)the amount of an impairment charge to be recorded in earnings. We adopted the provisions of the new guidance for the quarter ended June30, 2009. Refer to Note 4, Note 5 and Note 12 to the condensed consolidated financial statements included in this report for disclosures related to the implementation of the new guidance. Subsequent Events In May 2009, the FASB issued new guidance establishing general standards of accounting for disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued, or subsequent events. The standard is based on the same principles that currently exist in the auditing standards. We are required to disclose the date through which subsequent events have been evaluated and for certain nonrecognized subsequent events, the nature of the event and an estimate of its financial effect or a statement that such an estimate cannot be made. We adopted the new provisions for the quarter ended June30, 2009. Refer to Note 1 to the condensed consolidated financial statements included in this report for the related disclosures. Codification In June 2009, the FASB codified existing accounting standards. The FASB Accounting Standards CodificationTM (ASC) is the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB and supersedes all existing non-SEC accounting and reporting standards. All ASC content carries the same level of authority and anything outside of the ASC is nonauthoritative. We adopted the new guidance for the quarter ended September30, 2009, which changed the way we reference accounting standards in our disclosures. Fair Value of Liabilities In August 2009, the FASB issued new guidance on measuring liabilities at fair value. The new guidance reaffirms that the fair value measurement of a liability assumes the transfer of a liability to a market participant as of the measurement

3. ACQUISITIONS

3. ACQUISITIONS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
3. ACQUISITIONS	3. ACQUISITIONS On October31, 2008, we acquired PHP Companies, Inc. (d/b/a Cariten Healthcare), or Cariten, for cash consideration of approximately $256.1 million. The Cariten acquisition increased our commercial fully-insured and ASO presence as well as our Medicare HMO presence in eastern Tennessee. During the first quarter of 2009, we continued our review of the fair value estimate of certain other intangible and net tangible assets acquired. This review resulted in a decrease of $27.1 million in the fair value of other intangible assets, primarily related to the fair value assigned to the customer contracts acquired. There was a corresponding adjustment to goodwill and deferred income taxes. On August29, 2008, we acquired Metcare Health Plans, Inc., or Metcare, for cash consideration of approximately $14.9 million. The acquisition expanded our Medicare HMO membership in central Florida. On May22, 2008, we acquired OSF Health Plans, Inc., or OSF, a managed care company serving both Medicare and commercial members in central Illinois, for cash consideration of approximately $87.3 million. This acquisition expanded our presence in Illinois, broadening our ability to serve multi-location employers with a wider range of products including our specialty offerings. On April30, 2008, we acquired UnitedHealth Groups Las Vegas, Nevada individual SecureHorizons Medicare Advantage HMO business, or SecureHorizons, for cash consideration of approximately $185.3 million, plus subsidiary capital and surplus requirements of $40 million. The acquisition expanded our presence in the Las Vegas market. The Cariten, OSF, and Metcare purchase agreements contain provisions under which there may be future contingent consideration paid or received, primarily related to balance sheet settlements associated with medical claims runout and Medicare reconciliations with the Centers for Medicare and Medicaid Services, or CMS. Any contingent consideration paid or received will be recorded as an adjustment to goodwill when the contingencies are resolved. During the first quarter of 2009, we paid $3.3 million to settle a purchase price contingency associated with the acquisition of OSF.

4. INVESTMENT SECURITIES

4. INVESTMENT SECURITIES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
4. INVESTMENT SECURITIES	4. INVESTMENT SECURITIES Investment securities have been categorized as available for sale and, as a result, are stated at fair value. Unrealized holding gains and losses, net of applicable deferred taxes, are included as a component of stockholders equity and comprehensive income until realized from a sale or an other-than-temporary impairment, or OTTI. Investment securities classified as current and long-term were as follows at September30, 2009 and December31, 2008, respectively: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses FairValue (in thousands) September30, 2009 U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations $ 1,242,072 $ 12,425 $ (861 ) $ 1,253,636 Mortgage-backed securities 1,418,907 29,679 (541 ) 1,448,045 Tax-exempt municipal securities 1,978,814 93,097 (6,599 ) 2,065,312 Mortgage-backed securities: Residential 167,170 24 (29,692 ) 137,502 Commercial 286,417 3,014 (13,468 ) 275,963 Asset-backed securities 151,198 4,319 (283 ) 155,234 Corporate debt securities 1,794,602 78,982 (17,326 ) 1,856,258 Redeemable preferred stock 19,993 1,650 21,643 Total debt securities 7,059,173 223,190 (68,770 ) 7,213,593 Equity securities 5,197 (86 ) 5,111 Total $ 7,064,370 $ 223,190 $ (68,856 ) $ 7,218,704 December31, 2008 U.S. Treasury and other U.S. government corporations and agencies: U.S. Treasury and agency obligations $ 587,207 $ 12,759 $ (68 ) $ 599,898 Mortgage-backed securities 1,268,956 28,974 (225 ) 1,297,705 Tax-exempt municipal securities 1,702,026 27,649 (40,213 ) 1,689,462 Mortgage-backed securities: Residential 450,867 1,565 (105,124 ) 347,308 Commercial 313,933 (53,634 ) 260,299 Asset-backed securities 156,618 27 (12,275 ) 144,370 Corporate debt securities 930,707 10,532 (99,842 ) 841,397 Redeemable preferred stock 18,052 1,650 19,702 Total debt securities 5,428,366 83,156 (311,381 ) 5,200,141 Equity securities 16,956 (1,655 ) 15,301 Total $ 5,445,322 $ 83,156 $ (313,036 ) $ 5,215,442 We participate in a securities lending program where we loan certain investment securities for short periods of time in exchange for collateral, consisting of cash or U.S. Government securities, initially equal to at least 102% of the fair value of the investment securities on loan. Investment securities with a fair value of $187.8 million at September30, 2009 and $437.1 million a

5. FAIR VALUE

5. FAIR VALUE
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
5. FAIR VALUE	5. FAIR VALUE The following table summarizes our fair value measurements at September30, 2009 and December31, 2008, respectively, for financial assets measured at fair value on a recurring basis: Fair Value Measurements Using Fair Value QuotedPricesin Active Markets for Identical Assets (Level 1) SignificantOther Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (in thousands) September30, 2009 Cash equivalents $ 1,386,839 $ 1,386,839 $ $ Investment securities 7,218,704 7,128,276 90,428 Securities lending invested collateral 176,692 176,692 Total invested assets $ 8,782,235 $ 1,386,839 $ 7,304,968 $ 90,428 December31, 2008 Cash equivalents $ 1,549,966 $ 1,549,966 $ $ Investment securities 5,215,442 5,123,516 91,926 Securities lending invested collateral 402,399 402,399 Total invested assets $ 7,167,807 $ 1,549,966 $ 5,525,915 $ 91,926 During the nine months ended September30, 2009 and 2008, the changes in the fair value of the assets measured using significant unobservable inputs (Level 3) were comprised of the following: Fortheninemonthsended September30, 2009 2008 (in thousands) Beginning balance at January1 $ 91,926 $ 18,698 Total gains or losses: Realized in earnings 39 27 Unrealized in other comprehensive income 171 697 Purchases, sales, issuances, and settlements, net (802 ) (1,133 ) Transfers in and/or out of Level 3 605 Balance at March31 91,939 18,289 Total gains or losses: Realized in earnings 16 45 Unrealized in other comprehensive income 222 (953 ) Purchases, sales, issuances, and settlements, net (1,018 ) 1,702 Transfers in and/or out of Level 3 95,523 Balance at June30 91,159 114,606 Total gains or losses: Realized in earnings 19 (2,051 ) Unrealized in other comprehensive income 196 1,501 Purchases, sales, issuances, and settlements, net (946 ) (7,044 ) Transfers in and/or out of Level 3 Balance at September30 $ 90,428 $ 107,012 Level 3 assets primarily include auction rate securities. Auction rate securities are debt instruments with interest rates that reset through periodic short-term auctions. The auction rate securities we own, which had a fair value of $72.3 million at September30, 2009, or less than 1% of our total invested assets, primarily consist of tax-exempt bonds rated AAA and AA and collateralized by federally guaranteed student loans. Liquidity issues in the global credit markets led to failed auctions. A failed auction is not a default of the debt

6. MEDICARE PART D

6. MEDICARE PART D
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
6. MEDICARE PART D	6. MEDICARE PART D The condensed consolidated balance sheets include the following amounts associated with Medicare Part D as of September30, 2009 and December31, 2008. Amounts included below relating to the 2008 contract year for the net risk corridor receivable of $58.8 million and the CMS subsidies receivable of $209.8 million at September30, 2009 are expected to be settled in the fourth quarter of 2009. September30, 2009 December31, 2008 Risk Corridor Settlement CMS Subsidies Risk Corridor Settlement CMS Subsidies (in thousands) Other current assets $ 77,013 $ 387,134 $ 78,728 $ 322,108 Trade accounts payable and accrued expenses (67,070 ) (614,931 ) (23,311 ) (219,676 ) Net current asset (liability) $ 9,943 $ (227,797 ) $ 55,417 $ 102,432

7. GOODWILL AND OTHER INTANGIBL

7. GOODWILL AND OTHER INTANGIBLE ASSETS
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
7. GOODWILL AND OTHER INTANGIBLE ASSETS	7. GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill, by operating segment, for the nine months ended September30, 2009 were as follows: Commercial Government Total (in thousands) Balance at December31, 2008 $ 1,266,919 $ 696,192 $ 1,963,111 Purchase price allocation adjustments related to prior year acquisitions 10,907 15,598 26,505 Contingent purchase price settlements related to prior year acquisitions 1,819 1,489 3,308 Balance at September30, 2009 $ 1,279,645 $ 713,279 $ 1,992,924 The Government segment includes goodwill of $49.8 million associated with our military services business, representing less than 3% of total goodwill. Our military services business primarily consists of the TRICARE South Region contract which covers benefits for healthcare services provided to beneficiaries through March31, 2010. For the nine months ended September30, 2009, premiums and ASO fees associated with the TRICARE South Region contract were $2.6 billion, or 11.3% of our total premiums and ASO fees. In July 2009, we were notified by the Department of Defense (DoD) that we were not awarded the third generation TRICARE program contract for the South Region which had been subject to competing bids. We filed a protest with the Government Accountability Office (GAO) in connection with the award to another contractor citing discrepancies between the award criteria and procedures prescribed in the request for proposals issued by the DoD and those that appear to have been used by the DoD in making its contractor selection. On October 28, 2009, we learned that the GAO had upheld our protest. We anticipate the GAO will publicly release a detailed version of its protest decision expeditiously to include the grounds for the decision and the nature of relief recommended by the GAO to the DoD. At this time, we are not able to determine what actions the DoD will take in response to recommendations by the GAO, nor can we determine whether or not the protest decision by the GAO will have any effect upon the ultimate disposition of the contract award, and therefore whether or not the protest decision is material. In connection with the award of the third generation TRICARE program contract for the South Region to another contractor, we performed an interim goodwill impairment test for the military services reporting unit. This goodwill was not impaired at September30, 2009. The following table presents details of our other intangible assets included in other long-term assets in the accompanying condensed consolidated balance sheets at September30, 2009 and December31, 2008: Weighted AverageLife at 9/30/09 September30, 2009 December31, 2008 Cost Accumulated Amortization Net Cost Accumulated Amortization Net (in thousands) Other intangible assets: Customer contracts 11.1yrs $ 321,385 $ 111,038 $ 210,347 $ 341,085 $ 86,288 $ 254,797 Provider contracts 18.0 yrs 36,253 6,

8. COMPREHENSIVE INCOME

8. COMPREHENSIVE INCOME
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
8. COMPREHENSIVE INCOME	8. COMPREHENSIVE INCOME The following table presents details supporting the computation of comprehensive income for the three and nine months ended September30, 2009 and 2008: Three months ended September30, Nine months ended September30, 2009 2008 2009 2008 (in thousands) Net income $ 301,519 $ 183,008 $ 789,016 $ 473,074 Net unrealized investment gains (losses) and other, net of tax 170,092 (121,359 ) 258,779 (186,505 ) Comprehensive income, net of tax $ 471,611 $ 61,649 $ 1,047,795 $ 286,569

9. EARNINGS PER COMMON SHARE CO

9. EARNINGS PER COMMON SHARE COMPUTATION
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
9. EARNINGS PER COMMON SHARE COMPUTATION	9. EARNINGS PER COMMON SHARE COMPUTATION Detail supporting the computation of basic and diluted earnings per common share was as follows for the three and nine months ended September30, 2009 and 2008: Three months ended September30, Nine months ended September 30, 2009 2008 2009 2008 (in thousands, except per share results) Net income available for common stockholders $ 301,519 $ 183,008 $ 789,016 $ 473,074 Weighted average outstanding shares of common stock used to compute basic earnings per common share 167,404 166,647 167,250 167,328 Dilutive effect of: Employee stock options 780 1,111 666 1,280 Restricted stock 1,062 820 942 784 Shares used to compute diluted earnings per common share 169,246 168,578 168,858 169,392 Basic earnings per common share $ 1.80 $ 1.10 $ 4.72 $ 2.83 Diluted earnings per common share $ 1.78 $ 1.09 $ 4.67 $ 2.79 Number of antidilutive stock options and restricted stock excluded from computation 4,615 3,876 6,105 3,019

10. STOCK REPURCHASE PLAN

10. STOCK REPURCHASE PLAN
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
10. STOCK REPURCHASE PLAN	10. STOCK REPURCHASE PLAN In the third quarter of 2008, the Board of Directors authorized the repurchase of up to $250 million of our common shares exclusive of shares repurchased in connection with employee stock plans. The shares may be purchased from time to time at prevailing prices in the open market, by block purchases, or in privately-negotiated transactions, subject to certain restrictions on volume, pricing and timing. During the nine months ended September30, 2009, no shares were repurchased pursuant to the program and, accordingly, as of November3, 2009, the remaining authorized amount totaled $250 million. The share repurchase program expires on December31, 2009. In connection with employee stock plans, we acquired 0.2million common shares for $8.3 million and 0.2million common shares for $13.0 million during the nine months ended September30, 2009 and 2008, respectively.

11. INCOME TAXES

11. INCOME TAXES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
11. INCOME TAXES	11. INCOME TAXES The effective income tax rate was 35.8% and 34.4%, respectively, for the three and nine months ended September30, 2009 compared to 35.3% and 35.4% for the three and nine months ended September30, 2008. The decrease in the rate for the nine months ended September30, 2009 primarily is due to the reduction of the $16.8 million liability for unrecognized tax benefits as a result of settlements associated with the completion of the audit of our U.S. income tax returns for 2005 and 2006 during the first quarter of 2009.

12. DEBT

12. DEBT
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
12. DEBT	12. DEBT The carrying value of long-term debt outstanding was as follows at September30, 2009 and December31, 2008: September30, 2009 December31, 2008 (in thousands) Long-term debt: Senior notes $ 1,642,761 $ 1,648,964 Credit agreement 250,000 Other long-term borrowings 37,663 38,068 Total long-term debt $ 1,680,424 $ 1,937,032 During the nine months ended September30, 2009, we repaid $250 million of amounts previously borrowed under our $1.0 billion credit agreement to fund the October 31, 2008 acquisition of Cariten. As of September30, 2009, there were no borrowings outstanding under our $1.0 billion credit agreement. The fair value of our long-term debt was $1,567.9 million at September30, 2009 and $1,503.4 million at December31, 2008. The fair value of our long-term debt is determined based on quoted market prices for the same or similar debt, or, if no quoted market prices are available, on the current rates estimated to be available to us for debt with similar terms and remaining maturities.

13. GUARANTEES AND CONTINGENCIE

13. GUARANTEES AND CONTINGENCIES
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
13. GUARANTEES AND CONTINGENCIES	13. GUARANTEES AND CONTINGENCIES Government Contracts Our Medicare business, which accounted for approximately 62% of our total premiums and ASO fees for the nine months ended September30, 2009, primarily consisted of products covered under the Medicare Advantage and Medicare Part D Prescription Drug Plan contracts with the federal government. These contracts are renewed generally for a one-year term each December31 unless CMS notifies us of its decision not to renew by August1 of the calendar year in which the contract would end, or we notify CMS of our decision not to renew by the first Monday in June of the calendar year in which the contract would end. All material contracts between Humana and CMS relating to our Medicare business have been renewed for 2010. CMS is continuing to perform audits of selected Medicare Advantage plans of various companies to validate the provider coding practices and resulting economics under the actuarial risk-adjustment model used to reimburse Medicare Advantage plans. Several Humana contracts have been selected by CMS for audit for the 2007 year and we expect that CMS will conduct additional audits for the 2007 contract year and beyond. We generally rely on providers to appropriately document all medical data including risk-adjustment data in their medical records and appropriately code their claim submissions, which we generally send to CMS as the basis for our payment received from CMS under the actuarial risk-adjustment model. The CMS audits involve a review of a sample of provider medical records for the contracts being audited. Rates paid to Medicare Advantage plans are established under a bid model, the actuarial process whereby our premium is based on a comparison of our beneficiaries risk scores, derived from medical diagnoses, to those enrolled in the governments Original Medicare program. As a result, we believe that an actuarially sound adjustment of payments from these audits would need to take into account the level of coding accuracy and provider medical record documentation completeness under the governments Original Medicare program, since the risk adjustment system, bids, benefit structures and payment rates were premised on that data. This would help to ensure that the audit methodology applied to Medicare Advantage plans accurately calculates the economic impact of the audit findings. Additionally, our payment received from CMS, as well as benefits offered and premiums charged to members, is based on bids that did not, by CMS design, include any assumption of retroactive audit payment adjustments. We believe that applying a retroactive audit adjustment after CMS acceptance of bids would improperly alter this process of establishing member benefits and premiums. While CMS has not formally announced its audit payment adjustment methodology, CMS has indicated that it may not necessarily include a comparison to Original Medicare coding accuracy and that it may make retroactive contract-level payment adjustments. Any such payment adjustments could occur as early as 2009, and could be effected prior to our, or other Medicare Advantage plans, having the opportunity to appeal au

14. SEGMENT INFORMATION

14. SEGMENT INFORMATION
	9 Months Ended Sep. 30, 2009 USD / shares
Notes to Financial Statements [Abstract]
14. SEGMENT INFORMATION	14. SEGMENT INFORMATION We manage our business with two segments: Government and Commercial. The Government segment consists of beneficiaries of government benefit programs, and includes three lines of business: Medicare, Military, and Medicaid. The Commercial segment consists of members enrolled in our medical and specialty products marketed to employer groups and individuals. When identifying our segments, we aggregate products with similar economic characteristics. These characteristics include the nature of customer groups as well as pricing, benefits, and underwriting requirements. These segment groupings are consistent with information used by our Chief Executive Officer. The accounting policies of each segment are the same and are described in Note 2 to the consolidated financial statements included in our Form 10-K for the year ended December31, 2008. The results of each segment are measured by income before income taxes. We allocate all selling, general and administrative expenses, investment and other revenue, interest expense, and goodwill, but no other assets or liabilities, to our segments. Members served by our two segments often utilize the same medical provider networks, enabling us to obtain more favorable contract terms with providers. Our segments also share indirect overhead costs and assets. As a result, the profitability of each segment is interdependent. Our segment results were as follows for the three and nine months ended September30, 2009 and 2008: Government Segment Three months ended September30, Nine months ended September30, 2009 2008 2009 2008 (in thousands) Revenues: Premiums: Medicare Advantage $ 4,135,198 $ 3,497,568 $ 12,340,786 $ 10,157,109 Medicare stand-alone PDP 578,142 782,855 1,812,638 2,562,925 Total Medicare 4,713,340 4,280,423 14,153,424 12,720,034 Military services 796,126 771,560 2,591,605 2,389,195 Medicaid 162,896 152,069 480,085 437,725 Total premiums 5,672,362 5,204,052 17,225,114 15,546,954 Administrative services fees 37,947 21,169 81,435 63,331 Investment income (loss) 44,936 (6,163 ) 132,894 80,930 Other revenue 997 455 2,713 1,316 Total revenues 5,756,242 5,219,513 17,442,156 15,692,531 Operating expenses: Benefits 4,646,245 4,377,790 14,514,775 13,489,494 Selling, general and administrative 583,474 532,530 1,731,624 1,578,054 Depreciation and amortization 34,575 30,523 100,320 88,986 Total operating expenses 5,264,294 4,940,843 16,346,719 15,156,534 Income from operations 491,948 278,670 1,095,437 535,997 Interest expense 17,447 6,969 50,160 18,084

Document Information

Document Information
	9 Months Ended Sep. 30, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-30

Entity Information

Entity Information (USD $)
	9 Months Ended Sep. 30, 2009
Entity [Text Block]
Trading Symbol	HUM
Entity Registrant Name	HUMANA INC
Entity Central Index Key	0000049071
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding	169,832,474