Aetna’s efforts in Medicare Advantage appear to have taken hold, and is credited as one of the reasons the insurer’s profits rose in the second quarter. The Wall Street Journal reports that Aetna saw a profit of “$1.2 billion, or $3.60 a share, compared with $790.8 million, or $2.23 a share, a year earlier.”
The growth came in part because of an increase in MA beneficiaries. Mark Bertolini, Aetna’s CEO, told analysts that the company wants to expand the geographic reach of its MA plans so that they encompass about 60% of the country’s Medicare population. Those plans now reach 56%.
“We saw about one-third of our [MA] growth come from new markets,” Bertolini said.
In addition the company has saved money because of its much-publicized withdrawal from many ACA markets.
Nevertheless, the WSJ reports, Aetna “did better than it had projected on two ACA programs, known as risk adjustment and reinsurance, for which the federal government recently calculated outcomes based on 2016 performance. Aetna had to pay out less to its competitors for the risk-adjustment program than it had planned, and received more from reinsurance.”
The two programs earned Aetna about $170 million for the quarter.
Aetna also points to its ability to hold down medical spending, specifically pharmacy costs, with the exception of specialty medications. Company officials attributed last year’s second quarter performance to costs related to its attempted purchase of Humana, which fell through.
Source: Wall Street Journal