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LOUISVILLE, Ky. (AP) -- Health insurer Humana Inc. posted a 44 percent jump in fourth-quarter profit Monday as its robust Medicare Advantage business drove higher government income, offsetting a slumping commercial segment dragged by the sluggish economy.

Louisville-based Humana also raised its 2010 earnings projection to a range of $5.15 to $5.35 per share, up from $5.05 to $5.25. Analysts expected a higher profit of $5.40 per share, according to Thomson Reuters.

Shares of Humana edged up 9 cents to close at $48.71 Monday.

The company's government segment posted pretax income of $452.3 million in the fourth quarter, up from $267.3 million a year earlier. The increase was due in part to lower claims expenses in its Medicare prescription drug plans and higher Medicare Advantage membership.

Meanwhile, Humana's commercial segment reported a wider fourth-quarter pretax loss mainly due to a higher percentage of premiums going to cover medical claims along with other higher expenses.

Jim Murray, Humana chief operating officer, said during a conference call that the company is "stepping back and reorganizing our commercial business."

"We're identifying geographies and products that make the most sense for us in parts of the United States, and that's how we're going to go to market going forward," he said.

Other large, publicly traded health insurers have been hurt by declines in employer-sponsored insurance enrollment, a trend blamed on high unemployment that trimmed the number of customers covered by employer-sponsored health insurance.

Wells Fargo analyst Matt Perry said in a research note that Humana's Medicare results were better than expected while its commercial business results did worse than anticipated. Perry said he sees potential for earnings-per-share upside for Humana from better Medicare health plan growth and margins as 2010 progresses.

Humana said its fourth-quarter consolidated benefit ratio - the percentage of premiums paid to cover medical claims - improved from a year earlier.

The health insurer earned $250.7 million, or $1.48 per share, for the period ended Dec. 31, meeting analysts' estimates. That's up from $174.1 million, or $1.03 per share, in 2008.

Revenue grew 2 percent to $7.63 billion but missed Wall Street's view of $7.78 billion.

For the full year, Humana earned $1.04 billion, or $6.15 per share, up nearly 61 percent from the previous year. Revenue grew 7 percent to $30.96 billion.

Michael B. McCallister, president and chief executive, summed up 2009 as success for Humana despite a "challenging environment."

"Looking ahead, we see multiple revenue growth opportunities across our spectrum of products for 2010," he said.

Humana's Medicare Advantage membership exceeded 1.5 million at year-end, up 5 percent from 2008. Medicare Advantage plans are government-sponsored, privately run programs for seniors that offer comprehensive health coverage.

Medicare Advantage premiums rose 12 percent to $4.07 billion in the fourth quarter.

Humana said membership in its stand-alone Medicare prescription drug plans totaled nearly 1.93 million as of Dec. 31, 2009, down more than 1 million members.

The company said the membership decline in the stand-alone drug plans was due mainly to some low-income seniors joining rival plans. Humana realigned its premium and benefit structures for those plans for 2009 to correspond with its prescription drug claims experience.

"At the end of the day, I think we just got our price a little high and we're suffering some market-share loss as a result of that," McCallister said during the conference call.

Humana said premiums in those Medicare drug plans fell 37 percent to $514.8 million in the fourth quarter.

Commercial segment medical membership totaled just over 3.4 million as of Dec. 31, down 6 percent from the end of 2008. Humana attributed much of the decline to the economic recession and higher unemployment, which hurt its employer-sponsored health coverage plans.

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AP Business Writer Michelle Chapman in New York contributed to this report.

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