References to the effects of the Patient Protection and Affordable Care Act of 2010 (PPACA) are continuing to pop up in health insurer and insurance distributor earnings announcements and earnings calls.
Mark Bertolini, chairman of Aetna Inc., Hartford (NYSE:AET), said during a call with analysts that he thinks health insurers that have underpriced coverage will have a hard time catching up any time soon.
Humana Inc., Louisville, Ky. (NYSE:HUM), said let the ratio of individual health product benefits to independent health product jump 2.7 percentage points, to 84.1%, in part because of concerns about the PPACA minimum medical loss ratio (MLR) provisions.
Doug Hammond, president of National Financial Partners Corp. (NFP), New York (NYSE:NFP), noted during an NFP call that his company already operates a busy private health insurance exchange, or insurance supermarket, in Massachusetts.
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Brokers play a critical role in the Massachusetts health insurance market, in an exchange environment, and that “has opened up several potential opportunities to bring our expertise and technology to other exchanges around the country,” Hammond said.
When working with employer clients, “our role as trusted advisor is as important as ever,” Hammond said.
Aetna is reporting $458 million in net income for the second quarter on $8.8 billion in revenue, compared with $537 million in net income on $8.3 billion in revenue for the second quarter of 2011.
The company ended the quarter providing or administering major medical coverage for 18 million people, down 1.2% from the number it was covering a year earlier.
Enrollment in plans that include health savings accounts (HSAs) or health reimbursement arrangements (HRAs) increased 6.1%, to 2.6 million.
Overall commercial enrollment fell 2.2%, to 16 million.
Medicare Advantage plan enrollment rose to 437,000, from 393,000, and Medicare supplement plan enrollment rose to 183,000, from 12,000.
The total ratio of medical benefits costs to medical benefits revenue rose to 82.4%, from 79.7%.
WellPoint said when it released its second-quarter earnings that it sees medical cost trends edging higher and predicting that the increase for the full year would come in toward the high end of what the company had predicted.
At Aetna, “medical cost trends are developing consistent with our guidance,” Bertolini said during the company’s earnings call.
Bertolini said overall market pricing “remains rational and competitive.”
Commercial customers that are unhappy might have to stay put, because pricing is so close, and that may increase insurers’ commercial customer retention levels, Bertolini said.
Bertolini said later that, in part because of PPACA, prudent insurers now have no room to underprice to gain membership.