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Accounting Change Hits Aetna Net

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NU Online News Service, April 25, 11:03 a.m. – Aetna Inc., Hartford, is reporting a $2.8 billion net loss for the first quarter on $5.3 billion in revenue, compared with a $48 million net loss on $6.4 billion in revenue for the first quarter of 2001.

The latest net results include a $3 billion, non-cash charge to comply with a change in the way U.S. companies account for the value of past acquisitions.

Excluding the adjustment, income increased to $138 million, from a net loss of $49 million. Operating earnings at the managed care unit increased to $45 million, from a net loss of $73 million.

Aetna ended the quarter providing major medical coverage for 15 million people, down 18% from the end of the first quarter of 2001.

Average health care premium revenue per commercial member fell 3.5%, to $275. But Aetna says it reduced its key commercial health maintenance organization medical cost ratio to 86.2% of premiums, from 90% in the first quarter of 2001, by increasing premiums faster than medical costs increased.