(AP Photo/PGR-HO)

The Patient Protection and Affordable Care Act of 2010 (PPACA) is beginning to sting health insurers.

Aetna Inc., Hartford (NYSE:AET), and Assurant Inc., New York (NYSE:AIZ), both included comments about the effects of the PPACA minimum medical loss ratio (MLR) rules in their third-quarter earnings releases.

The PPACA MLR rules require insurers and health plans to spend at least 85% of large group revenue and 80% of individual and small group revenue on health care and quality improvement efforts.

Aetna is reporting $490 million in net income for the quarter on $8.5 billion in revenue, compared with $498 million in net income on $8.5 billion in revenue for the third quarter of 2010.

Aetna ended the quarter providing or administering major medical coverage for about 18 million people, down 1.6% from the total recorded a year earlier.

Enrollment in personal health account plans increased 7.8%, to 2.4 million, but overall commercial plan enrollment fell 2.1%, to about 17 million.

The total commercial medical benefit ratio, or ratio of benefits to premium revenue, fell to 77.8%, from 80.5%.

Selling expenses fell 12%, to $269 million.

Joseph Zubretsky, the Aetna chief financial officer, said “fewer than 20%” of the company’s core commercial pools are in “MLR rebate status,” and that MLR considerations affect about 25% to 30% of the corresponding premiums.

Rebate exposure is highest for large group and lowest for small group coverage, Zubretsky said.

“A high percentage of our rebate exposure is concentrated in just a few of the pools,” Zubretsky said.

The past year was tricky because “we did not have detailed regulatory guidance on how the rebate pools would work until after the business was priced,” Zubretsky said.

Another factor is that utilization was lower than Aetna had expected.

Aetna expects to reduce large-group rebates in 2012 by adjusting pricing, and it expects to reduce individual products through its commission strategy, Zubretsky said.

Throughout the market, “we see the pricing environment as competitive but still rational,” Aetna Chairman Mark Bertolini said.

At the start of the call, Bertolini focused mainly on Aetna’s Medicare and Medicaid lines.

“We continue to believe [Medicaid] will be a growth engine for Aetna over time,” Bertolini said.

Assurant — a multi-line carrier — is reporting $76 million in net income for the third quarter on $2.1 billion in revenue, compared with $142 million in net income on $2.1 billion in revenue for the third quarter of 2010.

Assurant Health, the Assurant health insurance unit, is reporting $5.8 million in net operating income on $438 million in net earned premiums, fees and other revenue, compared with $5.3 million in operating income on $478 million in net earned premiums, fees and other revenue.

Excluding the effects of income tax calculations, the unit’s MLR rebate costs amounted to $9.3 million, Assurant says.

Another company, Symetra Financial Corp., Bellevue, Wash. (NYSE:SYA), is reporting $11 million in overall net income on $455 million in revenue, compared with $57 million in net income on $485 million in revenue for the third quarter of 2010.

Symetra sells stop-loss coverage — coverage that helps employers protect self-insured health plans against catastrophic losses. An acquisition of another company’s book of stop-loss business helped increase stop-loss revenue to $120 million, from $98 million. New stop-loss sales increased to $16 million, from $15 million.