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Tuesday, Oct 28 2014

Full Issue

Big Insurers, Hospitals, See Increased Earnings

Aetna, the nation's third-largest health insurer, raised its profit forecast as enrollment continues to increase and as it prepares to expand its reach into government insurance exchanges under the Affordable Care Act. Hospital operator Universal Health Services Inc., also saw its third-quarter revenue rise as it benefits from a rebound in admissions from the growth in insured patients.

Aetna Inc., the third-largest U.S. health insurer, raised its profit forecast for the year as enrollment increases. Enrollment in Aetna plans reached 23.6 million in the quarter, an increase of 470,000 members from the second quarter. Aetna will offer coverage in 18 Affordable Care Act exchanges in 2015. UnitedHealth Group Inc., the nation’s largest insurer, is expanding to as many as two dozen states. About 7.3 million Americans were enrolled in plans as of mid-August through the exchanges that are a centerpiece of the Patient Protection and Affordable Care Act known as Obamacare. (Chen, 10/28)

The insurer has posted higher membership and revenue of late, but medical costs have also increased, although it has categorized that trend as moderate. Expensive treatments for hepatitis C have been among the biggest pressures on results, along with the company’s involvement in public health exchanges. Aetna’s total medical benefit ratio—the amount of premiums used to pay patients’ medical costs—was 82.3%, compared with 83.1% a year earlier. The ratio rose on the commercial side due to costs associated with hepatitis C treatments and the Affordable Care Act health law, among other reasons, but it declined for its government business. (Calia, 10/28)

Universal Health Services Inc. said its third-quarter revenue rose 11% as the hospital operator continued to benefit from a rebound in admissions. Like some other hospital operators, Universal Health has been benefiting from a wave of newly insured patients under the Affordable Care Act. (Stynes, 10/27)

This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
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