This earnings call contains forward-looking information.  The forward-
looking statements are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995.  Forward-
looking statements may be significantly impacted by certain risks and 
uncertainties discussed herein and also described in the Company's
Annual Report on Form 10-K filed with the Securities and Exchange
Commission for the year ended December 31, 1996.


        1ST QUARTER 1997 EARNINGS CALL
                    SCRIPT
                       
Good morning and thanks for joining us.  It's great to
have a quarter where we can show sequential
improvement in earnings per share . . . I hope it will
be the start of many more.  I'm happy to tell you we've
been making great progress on the reinvention of
Humana, but we've still got a lot of work to achieve
our 1997 Earnings growth objective and continue the
sequential improvement in earnings.
Thanks, Jim.

I realize we are the first of our peer group to
announce earnings and, while there is probably a
temptation to want us to comment on industry wide
trends, I perceive our situation, due to the various
reinvention efforts we have described for you in
previous calls, as being somewhat unique.  So, I'd like
to spend most of our remaining time this morning
describing those items that we think are critical to
evaluating our success in the quarter, given our
unique mix of business and reinvention efforts. 
Where appropriate, I'll offer a bit of commentary or
industry-wide trends and issues.

First, we look at our return to shareholders in the
quarter and compare it to our results in the prior
quarter and to our plan.  At .24 cents/share, we are
very pleased with a 26% improvement over fourth
quarter '96 results.  And, although we may have met
your expectations for the quarter, we did not meet our
own expectations, which has caused us to improve
our work plans in those areas lagging internal
expectations.  Throughout my comments, I will
describe for you those areas where we think we can
and should see improvement.  I'd like to begin by
examining the various market segments in which we
operate and our results in each segment.

MEDICARE
Although our margins are best on our Specialty
Product business, our biggest real dollar profit
contributor is our Medicare Risk business.  We had
solid Medicare Risk membership gains with 16.9%
annual, same store growth in the past 12 months, and
4.3%  growth in the first quarter over the fourth
quarter, which annualized is a 17% growth rate. 
Clearly, these are good results.  We believe they will
get even better as our Medicare Risk sales in our two
new Medicare Risk markets, Dallas and Cincinnati,
begin to kick-in in the second quarter.  We will be
disappointed with anything less than 20%
membership growth in Medicare Risk for the year. 
That doesn't mean 20% growth is a given, just that
we've set our internal target above that level.  Frankly,
in order to realize growth above 20%, we are going to
need to secure HCFA's approval to our point of
service product filing which we have targeted for
introduction in eleven markets as well as HCFA
approval to our filing to sell a Risk product in
Milwaukee, Lexington, and some additional counties
outside Louisville and Chicago.

Although our Medicare Risk membership growth is
good, we were a bit disappointed with the earnings
results from this segment and I'll talk more about that
when we discuss medical costs.

SMALL GROUP
Now let's look at our small group commercial
business - the second biggest contributor to corporate
profit.  We define the small group market as groups
or employers with less than 100 members.  Growth in
this segment was flat in the first quarter but continued
to contribute very nicely to our profits.  We continue
to experience particularly nice results in markets
where Humana and the old Emphesys operation both
had a presence - places like Illinois, Wisconsin, Ohio,
and Texas.  In markets like Minnesota where we don't
have much presence as a company and where there
have been legislative changes that limit or eliminate
our potential for profit, we are exiting the market. 
The state of New Jersey is another such casualty and
we will, by year-end, exit that state and our 7400
members in New Jersey will find coverage with other
carriers.

SPECIALTY PRODUCTS
Now let's look at our highest margin products - our
specialty products, which are our Life, Dental,
Disability, and Workers Compensation products. 
Most of our sales of these specialty products are made
to smaller groups and the profitability of these lines is
really tied to our small group medical sales.  We've
seen a strong 20% growth in our specialty product
membership over the last 12 months.  Thirty-two
percent (32%) of this growth is due to the growth in
our Workers Compensation products, where
legislative changes in some of our target or core
states, like Florida and Ohio, mandated the sale of
managed care in Workers Compensation.  We've seen
our Workers Comp membership grow 116% to
286,300 members during the first quarter.
We anticipate a continued growth in earnings,
attributable to our specialty products, as we cross sell
these products to our in-force medical clients.

CHAMPUS
Our CHAMPUS operation continues to perform well
financially and again, although the margins on that
business are small, it did contribute to our
profitability in the quarter and should continue to do
so throughout the year.
The bid process for CHAMPUS Regions 2 & 5 has
been pushed back a bit with best and final offers due
in June, a decision by CHAMPUS rendered early fall,
and the administration of the business beginning next
spring.  We continue to believe we have very good
prospects of securing this additional CHAMPUS
business and the associated one million members in
our core midwest markets.

LARGE CASE
We should now buckle up for a review of our large
case commercial business segment.  Our self-funded
or ASO, Administrative Services Only, is profitable
and low risk.  Although the margins aren't big on this
business, it does contribute to our leverage in a
market.  We've seen a 20.2% growth in our ASO
business during the quarter and, although the business
is profitable, it does not yet contribute in a
meaningful way to earnings.  We do, however, think
that ASO business can contribute to earnings in a
more meaningful way in future years.

It is interesting to note that prior to this year, the
company actually discouraged the sale of self-funded
or ASO business.  The fact is, though, that many
large customers want a self-funded product from a
managed care company that can not only process
claims efficiently, but help them improve the health
of their employees and customers are willing to pay
higher fees for non-traditional ASO services.  So, we
plan to sell more ASO business in the future and offer
some of our services on a fee basis reduce their
claims costs.

Now, to fully insured commercial business.
The fully insured midsize and large case commercial
segment of our business has caused us the most
difficulty from an earnings perspective.  It is the most
crowded, price sensitive market segment in the
business where everyone from TPA's to indemnity
companies to PPO companies to HMO or managed
care companies are all struggling for market share. 
Based upon the new pricing and renewal rating
methodologies we have established, we are seeing
improvement in our financial results in this market
segment.  However, the flip-side of our pricing
discipline has been some membership losses in this
segment.  To give you some idea, though, for how
severely under-rated this business was, and probably
is, for many companies with large commercial blocks
of business, we estimate it will take us until the
middle of next year to turn a profit on our business in
this market segment.  If the Health Insurance
Portability and Accountability Act, which becomes
effective in July, chases some of our competition out
of the small group segment and into the mid-size and
large case market in a bigger way, Humana and our
competitors will see even more price pressure in this
market segment.

Now since we have consciously begun raising
premiums in this market segment and have now
begun to require that these mid-size and large
employers pay a rate or premium commensurate with
the underlying risk of their case, we have seen a
reduction in our commercial membership, as Jim
mentioned.  This result is no surprise, and was
forecast during our prior earnings calls.  Since this
kind of result could be anticipated, we began
shedding expenses in the first quarter so that our
underlying infrastructure was consistent with our
membership.  In the first quarter, we eliminated 252
of the 700 to 900 positions targeted as part of the
work force reductions we announced last December. 
So, we're making good progress on our work force
reduction plan and believe we can complete this effort
by the end of the third quarter.

ADMINISTRATIVE EXPENSES
A good aggregate test of our results relative to
expense management, though, is our administrative
ratio, which we are working to keep flat in the first
and second quarter, as we make investments in our
service, systems and medical management
infrastructure.  Our plan calls for us to manage down
our administrative expense ratio in the third and
fourth quarter.  Our 15.8% administrative ratio for the
quarter was the same as fourth quarter of '96, so we
are where we want to be on our expense management
efforts, but we have our work cut out for us as we
continue to add resources to our medical management
area.

REVENUE YIELD
Next, let's look at revenue yield.  As most of you
know, revenue yield is the result of rate renewal
actions or premium increases minus benefit buy
downs and the change in the geographic mix of
business.  For the quarter, our revenue yield on our
commercial business was up 2.9% and our Medicare
Risk PMPM premium yield was up 4.6%.  These are
very strong results.

Now, the Risk revenues will actually dip a bit during
the course of the year from the current 4.6% level as
we write more Medicare Risk business in lower
premium expansion areas, like Sarasota, relative to
our sales in higher premium core areas, like South
Florida.  Nonetheless, a 4% increase in our Risk
premiums could be greater than our cost increases,
which may allow further some margin expansion in
our Medicare Risk business.  However, some of this
margin expansion opportunity is being mitigated by
growth in some of our new Medicare markets.

Our commercial PMPM premium yield of 2.9% will
continue to increase throughout the year but not by a
great amount given the very tight competitive pricing
environment and the fact that increased sales of our
Point of Service product at lower rates will lower per
member per month yields.  As of the end of the first
quarter, 45% of our commercial membership has
already renewed and, therefore, 75% of our revenue
for the year has already been determined, given the
prospective pricing nature of our business.  From a
revenue standpoint, we are already focused on selling
the needed rate increases in 1997 that will rollover
into 1998 and which impact our revenue and earnings
next year.

MEDICAL COSTS
With revenue for the year largely determined, we turn
our focus to our medical costs . . . Our days/1000 are
down .8% and 1.9% for commercial and Medicare
Risk, respectively, against the first quarter of 1996. 
This is good news considering that commercial days
were up and Risk days flat in the fourth quarter of
1996 versus 1995.  Nonetheless, our internal plan
called for greater improvement and we are taking
actions now to generate better results for the rest of
the year.

As you know, or should at least expect, we have
detailed profit improvement plans on a
market-specific basis, with many initiatives designed
to improve our medical cost position.  In many
markets, these plans called for the introduction of our
hospital inpatient management or HIMS system.  We
initiated HIMS programs in five of our markets
during the last four months of 1996.  Given the lack
of internal resources to initiate the HIMS program in
many markets, we relied on a mix of internal and
external resources to get this program up and running
quickly.  Frankly, results have not met expectations. 
We underestimated the time required to recruit and
train new physicians and, as a result, we are not
covering as many of our members with the HIMS
program as we had planned.  We are initiating a
HIMS program in three more markets during the
second quarter.  We have recruited 21 additional
HIMS physicians and, with the addition of our new
medical director this quarter, and even greater
executive focus on this initiative, we plan to get back
on our internal timetable for HIMS program
introductions in the fourth quarter.

Statistics on our Days/1000, Inpatient costs,
Outpatient costs, and Physician costs all reflect a
stable system and common cause variation, so there is
really nothing exceptional to report in these areas.

PHARMACY
Statistics on our pharmacy costs do, however, suggest
a special cause, and perhaps we can give you some
feel for our pharmacy cost position, some of the
underlying causes for increasing pharmacy costs, and
our efforts to reduce those costs.

As other managed care companies have reported, we
have seen an increase in our pharmacy benefit costs
in the last year.  Compared to the first quarter of
1996, we have seen our cost per prescription increase
11.7% and 13% for our commercial and Medicare
business, respectively.  We determined a number of
reasons for this increase in utilization.

Our disease management efforts cause us to treat
conditions with pharmaceuticals at earlier stages of
illness.  This is better for the patient and most cost
effective in the long run, but it does result in higher
pharmacy costs as a percent of premium.

While we have been effective at managing our costs
for drugs in which there are clinically appropriate
drug substitutions available, there has been a
proliferation of new drugs introduced recently for
which there are no substitutes yet available.  Again,
these new drugs are more effective for treating
specific conditions, but result in higher pharmacy
costs.

Clinical researchers are recommending new treatment
outcomes goals for many conditions, such as lowering
cholesterol to a level of 130 versus the traditional goal
of 160.  This means more members are being treated
with pharmaceuticals and for longer periods than
before.

Drug manufacturers are introducing more effective,
but much more costly drugs to the marketplace. 
Again, while providing these drugs is the right course
of treatment for our members, it is also more
expensive.

New recommended drug combination therapies and
increased patient demand for pharmaceuticals are due
to very efficient consumer advertising and physician
detailing.

We are attacking those issues we can and
coordinating our effort to better control outcomes and
costs by:  continuing to aggressively implement drug
formularies; negotiating favorable reimbursement
rates with our retail pharmacy partners; improving
our internal pharmacy transaction processing systems
to improve accuracy, customer service and to reduce
waste and fraud; redesigning benefits to increase
member copays and to align member incentives with
those of our provider and retail pharmacy partners;
and as part of our primary medical centers plan, we
intend to provide incentives to our members to have
their prescription filled in our staff model pharmacies
where we dispense drugs at a lower cost (to Humana)
than retail pharmacies.  We are also centralizing
much of the administrative processes currently
managed in our health plans and recognizing it as part
of our Medical Affairs area.  This will allow our local
pharmacy management staffs to spend their time
working with physicians to more effectively manage
our members' care.

Continuing now with our discussion of medical
management, I would mention that with the addition
of our new chief medical officer and chief
information officer in the first quarter, we're moving
rapidly to fortify our resources and efforts in medical
management.  During the quarter, we appointed a
director of operations for the 100 primary care centers
we own and operate, a director of physician practice
development, a director of medical technology
assessment, a director of medical information
advancement, a director of physician profiling, and a
medical director of pharmacy management - all
critical functions that will help us improve our
medical management results.  I've mentioned to you
before that we are redirecting resources to medical
management and these appointments should give you
some perspective on the breadth and depth of our
focus on various medical management initiatives.  It
is going to take some time for these folks' efforts to
bear fruit and we certainly cannot expect them to
provide tangible impact on claims costs and earnings
in the second quarter.  But you understand our
business and the tremendous potential impact of solid
medical management, so I think we've all got
something to look forward to in this area.

SERVICE
I should also make some mention of our service
improvements.

We've made a lot of good progress improving those
aspects of service that are under our direct control, in
areas like claims payment for PPO claims,
enrollment, and identification card and certificate
issuance.  Do these improvements help us keep
customers?  Sure they will.  Do they help us sell new
customers?  Not very much, at least not yet.

As you know, the single biggest determinant of
customer satisfaction is people's interaction with their
physician and one of the greatest sources of
dissatisfaction is the referral process.

Last month, we made several changes to our referral
process which eliminated the need for a referral for
preventive services, total OB services, well woman
treatment, selective lab and radiology procedures,
emergent diagnoses, serious ongoing treatment,
routine eye exams and referrals by all capitated
providers.

BRAND
As the industry becomes more consumer-focused, the
importance of a strong brand and high consumer
confidence in HMOs' ability to deliver on a
meaningful service promise is critical to creating
consumer preference.  In the first quarter, we
introduced a new logo as part of our effort to
revitalize the Humana brand and provide a platform
for communicating our new vision and new
capabilities.  We are and will continue to build the
infrastructure that can deliver extraordinary service at
every point of contact.

BEFORE CLOSING
Before closing, I want to say a word about our 1997
Management Incentive Plan, because I think it is
reflective of our new culture and commitment to
earnings improvement in 1997, as well as the creation
of a company that can produce sustainable
improvements in future years.  For 1997, we have
changed the incentive plan for all our managers.  We
now have one consistent company-wide plan, based
on quality and growth in earnings and membership. 
It's a rolling three year plan where our 1997 results
impact folks' incentive in each of the next two years -
so there is a strong emphasis on taking the actions
necessary to turning around our results in '97 and to
also take actions that will favorably impact results in
future years.

In a company with 18,000 people, it's critical to get
everyone working to meet the needs of our customers
and understanding how their efforts are paying off for
our shareholders and, if we are off on our plan
anywhere, people need to know how to get back on
track.  One hour after this call, every one of our
associates will know where we stand relative to our
goals and will hear confirmation of what needs to
happen for us to continue to realize sequential
improvement in return to our shareholders.  Our
Board has also instituted stock ownership guidelines
for our top 50 managers that require these managers
to own meaningful amounts of individually purchased
Humana stock.  We want to ensure that our managers'
objectives are aligned with the shareholders and
nothing does this better than having them spend their
own money to become owners.



IN CLOSING
In closing, I'm reminded of a comment made to me by
one of the people in our Military Health Services
operation that runs our Champus business.  He said
that on your first day at sea, on an aircraft carrier, you
are told not to fall off because it takes 26 miles to turn
the ship around.  Well, with David Jones' leadership
and the help of our Board, we're trying to turnaround
a pretty big ship in a lot less than 26 miles and a lot
less than 26 months.  We're seeing good progress
which should be clear to you from our results.  We've
still got a ways to go on many fronts and it remains to
be seen now quickly employers, agents, consultants,
physicians, and our members respond to our various
improvements.  While we don't yet have evidence that
our initiatives should cause anyone to raise our annual
earnings expectation beyond consensus expectations,
we do believe we are doing all the right things and
doing them as fast as we possibly can, as we strive to
improve the health of our members and provide value
to our customers, partners, and shareholders.  The
evidence of our efforts, although below our internal
expectation, does provide sequential improvement in
earnings results, and with the full compliment of
management now in place, and with our Board's
continued help and support, we are very enthusiastic
about our long term prospects.