Executives from Aetna (NYSE:AET) talked about the new Patient Protection and Affordable Care Act (PPACA) reinsurance program and other PPACA programs today during a conference call with securities analysts.
Aetna held the call to review second-quarter earnings. The company is reporting $549 million in net income for the quarter on $15 billion in revenue, up from $536 million in net income on $12 billion in revenue for the comparable quarter in 2013. The company ended the quarter providing or administering coverage for 23 million people, up from 22 million people a year earlier.
The company has been selling qualified health plan (QHP) coverage through the exchanges in 17 states. It hopes to start selling QHPs through the exchange in Georgia in 2015.
Executives said only about 2 percent of Aetna’s health plan enrollees have QHP coverage from an exchange, but analysts pressed the executives for any ideas they might have about how the QHPs will really work. The executives said they might have a better idea three months from now, after the end of the third quarter.
Aetna started the year with about 600,000 holders of traditional individual and family commercial coverage. The company had 230,000 exchange QHP enrollees at the end of the first quarter. The company added 360,000 QHP enrollees in the second quarter and now has about 600,000 QHP enrollees. They expect attrition to leave it with about 500,000 QHP enrollees at the end of the year.
Three months ago, Aetna executives were estimating the company would end the year with 450,000 QHP enrollees.
All non-grandfathered policies, both inside and outside the PPACA exchange system, are eligible for benefits from the PPACA reinsurance program. The program is supposed to reimburse a company for 80 percent of the eligible claims paid above a $45,000 attachment point and below a $250,000 cap.