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Health Carriers: We're Fine

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Two managed care companies say reports of their sector’s demise have been greatly exaggerated.

CIGNA Corp., Philadelphia, and UnitedHealth Group Inc., Minnetonka, Minn., say that their medical claims are in line with expectations and that they expect to do about as well as they originally had predicted this year.

Earlier this week, investors reacted negatively when WellPoint Inc., Indianapolis, warned that the weak economy might hurt its earnings, and Humana Inc., Louisville, Ky., reported that higher claims costs for Medicare drug plans might hurt its earnings.

At CIGNA, membership, revenue and costs are looking fine, and a large group health business acquisition is still on track, the company says.

At UnitedHealth, a bad flu season has led to a modest increase in claims costs, but other trends, such as the commercial medical cost trend, seem to be looking all right, the company says.

At UnitedHealth, the investment portfolio has accumulated net unrealized capital gains, not losses, the company notes.

The soft economy still could hurt results, but “management believes it is premature to draw adverse conclusions,” the company says.


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