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More insurers hint at PPACA exchange strategies

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Humana Inc. (NYSE:HUM) is gearing up to participate in 14 Patient Protection and Affordable Care Act (PPACA) health insurance exchanges.

Cigna Corp. (NYSE:CI) is talking about being “sharply focused on a limited number of markets.”

The comments came out during conference calls the companies held to discuss their first-quarter earnings.

Humana is reporting $473 million in net income for the latest quarter on $10 billion in revenue, up from $248 million in net income on $10 billion in revenue for the first quarter of 2012.

The company ended the quarter providing or administering coverage for 12 million people, up 4.6 percent from the number it was covering a year earlier.

Enrollment in employer-sponsored insured plans increased 1.3 percent, to 1.2 million, and enrollment in self-insured plans that Humana administered fell 2.9 percent, to 1.2 million.

Cigna is reporting $57 million in net income on $8.2 billion in revenue, compared with $371 million in net income on $6.8 billion in revenue for the first quarter of 2012.

Cigna’s medical plan enrollment enrollment increased 3.1 percent, to 14 million. 

Humana executives said they already are planning for exchange plan “marketing and messaging” campaigns while planning their Medicare Advantage marketing campaigns.

James Murray, the chief operating officer, said the company hopes to participate in exchanges — Web-based health insurance supermarkets — in states in which the company has significant network strength.

David Cordani, Cigna’s president, said he thinks his company could benefit as the health exchange market matures from applying the individual health insurance direct marketing expertise its international benefits business has gained in other countries to the U.S. market.

Outside the United States, Cigna sells health insurance to consumers through telemarketing, television ads, direct-response programs and bank insurance programs as well as through the Internet, Cordani said. 

Insurance brokers, meanwhile, are talking about their private health insurance exchange programs during their earnings calls. 

Executive at Marsh & McLennan Companies Inc. (NYSE:MMC), for example, said the company’s Mercer Marketplace private exchange program has lined up many coverage suppliers, including Cigna and Humana, and has many employers thinking about using the marketplace.

Executives at Arthur J. Gallagher & Company (NYSE:AJG), which is creating a private exchange, said they think exchanges will have a big effect on employers with fewer than 50 lives and some on employers with 50 to 100 lives, but much less on bigger employers, and that the company sees the exchanges and exchange insurers recognizing the need to work with brokers.

Executives at Willis Group Holdings Public Limited (NYSE:WSH) said they are watching the exchanges closely but expect a high percentage of the kinds of employers that Willis serves to continue to use intermediaries.

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