Steadier medical care costs contributed to higher profits at Aetna Inc. and PacifiCare Health Systems Inc. during the third quarter.[@@]

Aetna, Hartford, is reporting $378 million in net income on $5.7 billion in revenue for the latest quarter, up from $1.3 billion in net income on $5 billion in revenue for the third quarter of 2004.

But the national managed care company notes that a huge tax refund associated with discontinued operations skew comparisons with the third quarter of 2004. Excluding the effects of the $250 million tax refund, income increased to $378 million, from $302 million, Aetna says.

Aetna ended the latest quarter providing or administering health coverage for 15 million people, 7.3% more than it covered a year earlier.

Enrollment in health plans that incorporate health reimbursement arrangements and other personal health accounts increased to 433,000, from 214,000 a year earlier.

The rise in operating profits is the result of “our continued diligence around medical cost management that has allowed us to have among the lowest medical costs in the industry,” Aetna Chairman John Rowe says.

PacifiCare, Cypress, Calif., a major managed care player in the Western states, is reporting $118 million in net income on $3.8 billion in revenue for the latest quarter, up from $88 million in net income on $3.1 billion in revenue for the third quarter of 2004.

Enrollment rose to 3.8 million at the end of the third quarter, up from 3 million a year earlier.

Although health maintenance organization membership declined slightly, enrollment in indemnity and preferred provider plans increased to 749,000, from 304,800.

Medicare Advantage membership rose to 731,600, from 693,000.

The private-sector commercial medical loss ratio improved to 81.3%, from 83.2%, PacifiCare says.

PacifiCare Chairman Howard Phansteil attributed the company’s strong earnings, which beat analysts’ expectations, to membership growth and lower-than-expected medical costs.