Last year was not kind to Humana (NYSE:HUM). A misstep in pricing its Medicare plan hurt earnings, which came in at $3.83 -- a whopping 22% decrease from 2007. 

But things look like they're turning around for the company. If you throw 2008 right out the window, Humana is guiding for EPS to grow at a compounded rate of 11% from 2007 to 2009.

Compare that to flat earnings growth for UnitedHealth Group (NYSE:UNH) and a 25% to 33% decrease for Coventry Health Care (NYSE:CVH) and you can see how well Humana is poised to rebound.

While the company is sticking with its 2009 EPS guidance of $5.90 to $6.10, the earnings will come from slightly different places than Humana had planned. The company is being forced to hold more cash because the stalled credit markets have made it hard for the company to find new bonds to invest in, and the lower interest rates are lowering Humana's investment income by $0.17 per share.

But it should make up for the lost income because it now expects to get a $0.10 per share benefit from lower taxes and $0.06 per share benefit for a pilot program it ran for Centers for Medicare and Medicaid Services.

Membership in its commercial insurance plans is expected to be flat this year, which doesn't seem too bad. Humana has been less affected by the economic downturn because it has fewer contracts with large companies that seem to be laying off large blocks of employees.

Humana is trading at an insanely cheap seven times next year's earnings. But it's easy to understand why investors would be a little skittish. This time last year the company was guiding for adjusted EPS growth of 15% to 19% in 2008 and look how that turned out.

The uncertainty of how President Obama is going to change health insurance is also dragging on Humana's stock. Until the details are worked out, Humana, WellPoint (NYSE:WLP), Cigna (NYSE:CI), Aetna (NYSE:AET), and the rest of the health-care industry are going to continue to have a weight on their shoulders.

More Foolishness on turnaround possibilities:

WellPoint and UnitedHealth are Motley Fool Inside Value selections. If you're interested in picking through the wreckage for possible turnaround candidates, you should have the Inside Value team on your side. Check it out for free with a 30-day trial.

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. UnitedHealth and Coventry Health Care are Motley Fool Stock Advisor recommendations. The Fool owns shares of UnitedHealth. The Fool's disclosure policy is out insurance for you.