Executives from Aetna Inc. (NYSE:AET) today gave only general information about the company’s current public health insurance exchange operations, said nothing about 2017 exchange plan menus, and called for policymakers in Washington to help them revamp the system.
“There’s still much to be done to ensure the long-term future of this program,” Aetna Chairman Mark Bertolini said today during a conference call the company held to go over first-quarter earnings with securities analysts.
Executives at UnitedHealth Group Inc. (NYSE:UNH) kicked off the current health insurance company earnings season last week by saying their company will respond to the heavy losses it suffered on the Patient Protection and Affordable Care Act (PPACA) exchange system in 2015, and expects to suffer this year, by pulling products off of the shelves of the PPACA exchange programs in all but a handful of states.
Executives from Centene Corp. (NYSE:CNC), which was known in the past mainly as a Medicaid and Children’s Health Insurance Program (CHIP) plan manager, said their company has been happy with its PPACA exchange operations; has earned high enough gains to have to pay into the PPACA risk corridors program, which is supposed to use cash from thriving exchange plan issuers to help struggling issuers; and may expand into PPACA exchange programs in states in which it has strong Medicaid plans.
Executives from Anthem Inc. (NYSE:ANTM) said Wednesday that they are unhappy with the performance of the exchange system, but their comments implied that the company is willing to stick with the system and work on strengthening it at least until 2018. They revealed no plans to expand into additional state exchange programs, but they did not talk about any moves to withdraw from the exchange programs they currently serve.
Aetna executives could have helped give investors, agents, brokers and others a better idea of what the PPACA exchange program might look like in 2017. Instead, they left the exchange watcher community in suspense.
For a closer look at what the executives said, read on.
1. Aetna as a whole did well in the first quarter.
Aetna is reporting $727 million in net income for the first quarter on $16 billion in revenue, compared with $778 million in net income on $15 billion in revenue for the first quarter of 2015.
The company ended the quarter providing or administering major medical coverage for 23 million people, or about 3 percent fewer than it was covering a year earlier.
Although net income was down, it was in line with what Aetna had projected and securities analysts had been expecting.
Medicare Advantage plan enrollment increased to 1.3 million, from 1.2 million.
Medicare supplement (Medigap) enrollment increased to 612,000, from 488,000.
Medicaid plan enrollment increased to 2.3 million, from 2.1 million.
Overall commercial plan enrollment fell to 19 million, from 20 million.
Enrollment in major medical plans associated with health savings account (HSA) or health reimbursement arrangement (HRA) programs increased to 4.3 million, from 4 million.
The company gave no specific financial information about the performance of its individual commercial health insurance operations or about what it might get from, or pay into, the PPACA risk corridors program or the other PPACA “three R’s” programs — the PPACA reinsurance program and the PPACA risk-adjustment program.
For Aetna, one factor that could throw off 2016 earnings projections is a spike in medical costs, and another is “low visibility at this juncture of the year into our ability to achieve our margin improvement goals in our ACA-compliant products, particularly the uncertainty related to three R’s accruals,” said Shawn Guertin, Aetna’s chief financial officer.
Executives noted that the company has been careful about the small-group market, because of a concern that expirations of grandmothering provisions, or provisions that have let small employers keep pre-PPACA coverage, will lead to market disruption.
See also: Aetna: What PPACA problem?