Two mainland U.S. health insurers, Humana and Cigna Corp., talked a little about how the big Affordable Care Act risk management programs are really working when they released their third-quarter earnings.
A third insurer, Puerto Rico’s Triple-S Management Corp., talked about the Zika virus, and the possibility that the government of Puerto Rico may lose the ability to pay for Medicaid and other public health programs.
Here’s a look at highlights from the quarterly reports the companies filed with the U.S. Securities and Exchange Commission, and from the conference calls Cigna and Triple-S organized for securities analysts.
Humana, a Louisville, Kentucky-based insurer, reported $450 million in net income for the third quarter on $14 billion in revenue, up from $3314 million in net income on $13 billion in revenue for the third quarter of 2015.
The company ended the quarter providing or administering health coverage for 14 million people, or about the same number as it covered a year earlier.
Medicare supplement insurance plans: The number of users increased 38 percent to 217,100.
Individual Medicare Advantage plans: The number of users rose 3.5 percent to 2.8 million.
Fully insured group plans: Enrollment fell 3.1 percent to 1.1 million.
Self-insured employer plans: Enrollment fell 20 percent to 570,300.
ACA public exchange individual plans: Enrollment fell 26 percent to 450,300.
Off-exchange, individual, ACA-compliant policies: The number of users fell 6.7 percent to 191,100.
“Grandmothered” policies and other non-ACA individual policies: The number of users fell to 84,800 from 149,300.
The company notes that enrollment in its group Medicare Advantage plans fell 26 percent, to 353,900, because one large account moved to a private exchange program.
Drafters of the ACA created a temporary reinsurance program, a temporary risk corridors program and a temporary risk-adjustment program in an effort to buffer health insurers against swings in health claim risk and other problems that might result from new ACA rules and programs.
Humana says it received $471 million in ACA reinsurance cash from the U.S. Department of Health and Human Services during the first three quarters of this year, down from $521 million in ACA reinsurance cash for the first three quarter of 2015.
The company paid $240 million in ACA risk-adjustment program charges to HHS for the first three quarters and received $84 million in ACA risk-adjustment program settlement cash. That compares with $186 million in ACA risk-adjustment payments made and $57 million in risk-adjustment settlement payments received in the comparable period in 2015.
The company received $30 million from HHS in late 2015 for the 2014 risk corridors program. HHS has paid only about 13 percent of what it says it owes Humana and other carriers for 2014. Humana says it does not know how much, if any, additional money it will get from the ACA risk corridors program. The program is supposed to collect cash from thriving ACA exchange plan issuers for 2014, 2015 and 2016 to help exchange plan issuers that do poorly in those years.
Humana has agreed to be acquired by Hartford-based Aetna. Humana has stopped doing quarterly conference calls with securities analysts while the deal is pending.
Cigna, a Bloomfield, Connecticut-based insurer, reported $456 million in net income for the third quarter on $9.9 billion in revenue, compared with $547 million in net income on $9.4 billion in revenue for the third quarter of 2015.
The company’s global health care unit reported $416 million in operating income on $6.8 billion in revenue, compared with $482 million in operating income on $6.6 billion in revenue.
The health care unit ended the quarter providing or administering major medical coverage for 15 million people, or 2 percent more than it was covering a year earlier.
Cigna says it will offer individual health coverage through seven Affordable Care Act public exchange programs for 2017. That’s the same number of ACA exchanges Cigna has been using for 2016.
But Cigna says its exchange footprint will change.
The company will continue to the state-based exchange programs in Colorado and Maryland, and the HealthCare.gov exchange programs in Missouri and Tennessee.