LOUISVILLE, Ky. (AP) -- Health insurer Humana Inc. reported a 28 percent drop in fourth-quarter profit Monday, driven by higher claim expenses from its stand-alone Medicare prescription drug plans, lower investment income and a loss in its commercial business.

The company again predicted a big turnaround in the next year, forecasting earnings per share in the range of $5.90 to $6.10 for 2009, compared with $3.83 for the year just ended.
Top company executives also gave assurances that the drag on Humana's 2008 earnings from its Medicare prescription drug plans, dogged by premiums the company set too low, were now in the past.
Humana's businesses are “well positioned to succeed” despite continued economic volatility, Humana President and Chief Executive Michael B. McCallister said in a conference call with industry analysts.
Humana's stock surged $2.20, or 5.8 percent, to close at $40.13 Monday.
Louisville-based Humana said it earned nearly $174.1 million, or $1.03 per share, for the three months ended Dec. 31, compared with earnings of $243.2 million, or $1.43 per share, in the year-ago period.
The results were within Humana's own forecast range for earnings in the quarter but came in below an average forecast of $1.07 per share by analysts polled by Thomson Reuters.
Revenue rose 18 percent to nearly $7.5 billion from $6.3 billion a year ago.
Total premium and administrative fees were up 19 percent from the previous year, due largely to an increase in average Medicare Advantage membership, the company said.
For the full year, the company's net income was $647.2 million, down 22 percent from $833.7 million the previous year. Revenue was up 14.5 percent to $28.9 billion for the just-ended year.
Membership in Humana's stand-alone prescription drug plans totaled nearly 3.1 million at the end of 2008, compared with 3.4 million a year earlier.