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Coventry Reports Higher Net Income

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NU Online News Service, Oct. 30, 3:36 p.m. – Coventry Health Care Inc., Bethesda, Md., a managed care company, is reporting $22 million in net income for the third quarter on $795 million in revenue, up from $15 million in net income on $635 million in revenue for the third quarter of 2000.

Coventry sells insurance to individuals and employee health plans. It also provides administrative services for some self-insured employee health plans.

Coventry provided or administered major medical coverage for 1.9 million people at the end of the third quarter, up 19%.

The company generated an average of $491 million in commercial insurance revenue for each member of a commercial health plan during the quarter, up 11%.

But Coventry notes that medical expenses increased almost as fast as rates: the share of premium revenue going to pay claims was 85.9%, down only 0.8 of a percentage point from the medical loss ratio for the third quarter of 2000.

Coventry notes that rates for commercial customers that renewed policies in the third quarter were up 17%.

“The company expects commercial rate increases to exceed 14% for the entire year,” Coventry says.