Health insurance company executives may be getting enough comfort with, and information about, the new world created by the Patient Protection and Affordable Care Act (PPACA) to look at it with their eyes open.
Representatives from Aetna Inc. (NYSE:AET) and a smaller insurer, Centene Corp. (NYSE:CNC), gave more details than many insurers have in the past about how PPACA is affecting their operations.
Aetna is reporting $778 million in net income for the first quarter on $15 billion in revenue, up from $666 million in net income on $14 billion in revenue for the first quarter of 2014.
The company ended the quarter providing or administering health coverage for 24 million people, up from 23 million people a year earlier. Enrollment rose 3.3 percent for commercial business, and 9.1 percent in Medicare and Medicaid plans, to 2.1 million.
Enrollment in commercial plans offered together with health savings accounts or health reimbursement arrangements rose 13 percent, to 4 million.
Enrollment in PPACA public exchange qualified health plans (QHPs) increased to 950,000, from 230,000 a year earlier.
Centene, which has traditionally focused on the government plan market, is reporting $63 million in net income for the latest quarter on $5.1 billion in revenue, up from $33 million in net income on $3.5 billion in revenue for the first quarter of 2014.
Centene ended the quarter providing or administering coverage for 4.4 million people, up from 3 million people a year earlier.
At Centene, public exchange enrollment increased to 161,700, from 39,700 a year earlier.
Earlier this month, UnitedHealth Group Inc. (NYSE:UNH) said little about PPACA or its exchange operations when it talked about its first-quarter results. Anthem Inc. (NYSE:ANTM) is set to release its earnings tomorrow.
For a look at what else Aetna and Centene are saying about PPACA World, read on.
1. Something bad could still happen.
Centene simply lists changes in federal and state laws and regulations, including PPACA and PPACA regulations, as potential sources of risk in the disclaimer that accompanies its earnings release.
Aetna has given a detailed list of the perils it may face in PPACA World, including:
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Increased fees, taxes and assessments related to health care reform.
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Adverse legislative, regulatory or judicial changes to PPACA laws or regulations.
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The implementation of the PPACA exchanges.
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The profitability of its PPACA exchange products, and problems such as an influx of QHP enrollees who are heavy users of health care.
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The fact that the federal government still has to develop the regulations and procedures needed to implement PPACA.
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The uncertainty caused by congressional efforts to block PPACA.
See also: Top court’s PPACA ruling could shake hospitals, insurers
2. Grandfathered and grandmothered individual coverage might be passing on.
A PPACA “grandfather” provision officially lets insurers keep health insurance policies that were issued before March 23, 2010, when PPACA was signed into law, in place, with only a few modifications.
In many states, a combination of federal guidance and state action is creating a “grandmothering” system that lets insurers continue coverage written after March 23, 2010, and before Jan. 1, 2014, when major PPACA provisions took effect.