One publicly traded health insurer that’s planning to stay in the market in 2016 — Anthem Inc. (NYSE:ANTM) — has just released earnings.
So has one carrier that’s agreed to an acquisition, Humana Inc. (NYSE:HUM), and one, Assurant Inc. (NYSE:AIZ), that’s announced plans to shut down its health insurance unit and focus on other markets.
For a look at what the companies have been saying about their financial results, the Patient Protection and Affordable Care Act (PPACA) and the overall economic climate, read on.
Anthem is reporting $859 million in net income for the second quarter on $20 billion in revenue, up from $731 million in net income on $18 billion in revenue for the second quarter of 2014.
The Indianapolis-based company ended the quarter providing or administering health coverage for 38 million people, 3.4 percent more than it was covering a year earlier.
Enrollment in self-funded plans increased 3.1 percent, and enrollment in fully insured plans increased 2.2 percent.
Anthem has agreed to acquire Cigna Corp. (NYSE:CI).
Joe Swedish, the company’s president, said during a conference call with securities analysts that insured group plan enrollment was flat. Enrollment in large self-insured employer-sponsored plans was up. The company had 893,000 enrollees in PPACA exchange plans. Exchange qualified health plan (QHP) enrollment was down 5,000 from the end of the first quarter, and that attrition is lower than expected, Swedish said.
Wayne DeVedt, the chief financial officer (CFO), shed some light on Anthem’s views on the PPACA “three R’s” risk-management programs.
Anthem is on track to get about as much cash as it had expected from the PPACA reinsurance program and will owe a bigger payable than it expected to the PPACA risk-adjustment program, DeVeydt said. The risk-adjustment program is supposed to use cash from issuers with low-risk enrollees to help issuers with high-risk enrollees.
See also: PPACA: Rise of the health detectives?
Even though the risk-adjustment payable is bigger than Anthem had hoped, Anthem has maintained excess reserves to protect itself against PPACA surprises, and the reserves will keep the risk-adjustment payable from hurting Anthem’s earnings, DeVeydt said.
Of the risk corridors program, DeVeydt said, “We’re pretty much in a net-neutral position…. We’re not really expecting any surprises.”
Image: Indianapolis (TS)
Humana is in the process of getting acquired by Aetna Inc. (NYSE:AET) and has stopped holding earnings calls.
Humana is reporting $431 million in net income for the latest quarter on $14 billion in revenue, compared with $344 million in net income on $12 billion in revenue for the second quarter of 2014.