(LHP Photo/Allison Bell)

A soft economy and a new regulatory environment may have affected the third-quarter earnings of two health insurers that reported results today – CIGNA Corp. and Coventry Health Care Inc.

CIGNA, Bloomfield, Conn. (NYSE:CI), says it really did earn more from continuing operations.

CIGNA is reporting $200 million in shareholders’ net income for the third quarter on $5.6 billion in revenue, compared with $307 million in shareholders’ net income on $5.3 billion in revenue for the third quarter of 2010.

Earnings at the health care unit increased to $248 million on $4.7 billion in premium and revenue, up from $240 million on $4.6 billion in fee revenue.

The loss was mainly the result of a $180 million loss in CIGNA’s run-off reinsurance operation, which is related to a discontinued variable annuity business.

The number of domestic health care plan enrollees held steady at about 11 million, and the number of international health plan enrollees increased to 1.2 million, from 1 million.

The “guaranteed cost care ratio” fell to 80.9%, from 80.4%.

During the company’s third-quarter earnings call, CIGNA executives seemed to be happier to talk about commercial health plan operations than executives at some major competitors have been in recent days.

The executives noted, for example, that the company already has 115,000 enrollees in the new accountable care organization plans, which are supposed to use new reimbursement strategies to encourage doctors and hospitals to work more closely together to manage the cost and quality of care for the whole patient.

But CIGNA is facing the same federal minimum medical loss ratio (MLR) rules that other carriers are facing.

The rules, imposed by the Patient Protection and Affordable Care Act of 2010 (PPACA), require carriers to spend 85% of large group revenue and 80% of individual and small group revenue on health care and quality improvement efforts.

CIGNA budgeted about $19 million, after taxes, on health plan rebates for the third quarter, executives said.

CIGNA President David Cordani said the company expects unemployment to stay about as high in 2012 as it is now.

“We’re not projecting any major change in the economic outlook,” Cordani said. “The economy will present challenges.”

Coventry, Bethesda, Md. (NYSE:CVH), is reporting $123 million in net income on $3 billion in revenue for the latest quarter, compared with $190 million in net income on $2.8 billion in revenue for the third quarter of 2010.

Coventry ended the quarter providing or administering health coverage for 3.4 million people, up from 3.3 million people a year earlier.

Enrollment in insured commercial health plans increased to 1.6 million, from 1.5 million.

The company’s commercial group risk medical loss ratio increased to 81.5%, from 76.8%.

Coventry executives said during their company’s earnings call that they are hoping the federal government will grant MLR waivers in some of the states in which they operate.

Randy Giles said individual health insurance business accounts for only about 6% of the company’s commercial health insurance premium revenue, but that most of that business “is in a rebate position.”

Coventry gets about 40% of the rest of the commercial business from small groups and 60% from groups that PPACA defines as large groups.

About half of the small groups are in a rebate position, and about a quarter of the large groups are in a rebate position, Giles said.

Coventry will continue to try to grow its commercial business, but with a “prudent pricing posture,” Giles said.

“Broadly, the competitive environment continues to be rational,” Giles said.