UPDATE 4-Humana profit jumps; insurer raises 2009 outlook

* Q1 EPS $1.22 vs $1.14 Wall Street view

* Sees FY EPS of $6.10 to $6.20

* Shares rise 6 percent (Adds regular trading, membership details, byline)

By Lewis Krauskopf

NEW YORK, April 27 (Reuters) - Humana Inc (HUM.N) posted a huge gain in first-quarter profit on Monday on improvement in its Medicare health plans for seniors, and the insurer raised its full-year earnings forecast.

Shares of Humana, which have been hurt by investor jitters over Medicare, rose 6 percent.

The large provider of Medicare plans became the latest U.S. health insurer to easily surpass Wall Street profit forecasts for the latest quarter, even as its shares remain pressured by fears over health care reform.

Net income rose to $205.7 million, or $1.22 per share, from $80.2 million, or 47 cents per share, a year earlier, when its Medicare business suffered.

Analysts, on average, had expected profit of $1.14 a share, according to Reuters Estimates.

Revenue rose 10.8 percent to $7.71 billion.

"We see many areas of strength in the quarter with overall good earnings quality," Goldman Sachs analyst Matthew Borsch said in a research note.

Humana posted pretax income of $166.1 million in its government segment, which includes Medicare, compared with a $3.2 million loss a year earlier. Lower claims expense in its prescription drug plans and implementation of premiums in its full-service Medicare Advantage plans helped results.

The results confirm Humana fixed problems with its Medicare prescription drug plans that plagued results last year, Sanford Bernstein analyst Ana Gupte said in a research note.

CONCERNS OVER MEDICARE

Humana's Medicare Advantage membership stood at 1.47 million at March 31, up 16 percent from a year earlier.

Concerns over the future of Medicare -- the U.S. government health program for seniors -- have hurt Humana shares.

Reimbursement rates for 2010, set earlier this year by the Centers for Medicare & Medicaid Services, fanned investor worries over Medicare's profitability, while the shape of broader U.S. health reform remains uncertain.

Humana shares rose $1.64 to $29.00 in morning trading. Through last week, Humana shares had fallen some 27 percent in 2009, compared with a 10 percent drop for the S&P Managed Health Care index .GSPHMO. At 4.6 times 2009 earnings estimates, Humana trades at about a 30 percent discount to the beaten-down group.

In Humana's commercial segment serving employers, the company reported pretax earnings of $127.7 million, compared with $127.2 million a year earlier.

The company projected its membership in plans serving small businesses would fall by 90,000 to 110,000 members this year, as its customers lay off employees because of the weak economy. It expects growth of 40,000 to 60,000 members in its plans sold directly to individuals.

Louisville, Kentucky-based Humana forecast full-year earnings of $6.10 to $6.20 per share. It had previously projected $5.90 to $6.10.

The higher forecast reflected improved performance in its government segment, partially offset by lower expected investment income, Humana said. (Reporting by Lewis Krauskopf; Editing by Derek Caney and Brian Moss)