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More health earnings snapshots: Humana, Cigna, Triple-S

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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.

Related: Anthem sees tough individual health competition

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.

Related: Cigna shares the individual health pain

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 exchange programs in Missouri and Tennessee.

But the company will leave the markets in Arizona, Georgia and Texas and instead offer coverage through in Illinois, North Carolina and Virginia.

Cigna says it has received all of the payments it was expecting to get from HHS for the ACA reinsurance and risk-adjustment programs, and about 75 percent of what it was expecting to get from HHS for the 2015 reinsurance and risk-adjustment programs.

Like Humana, Cigna has received about 13 percent of what it was owed for 2014 for the ACA risk corridors program and nothing else. Several competitors have sued the U.S. government to collect more cash from the risk corridors program. Cigna says it’s monitoring those suits. 


Triple-S, which is based in San Juan, Puerto Rico, has the rights to use the Blue Cross and Blue Shield trademarks in Puerto Rico, the U.S. Virgin Islands, Costa Rica, the British Virgin Islands and Anguilla.

The company reported a $1.9 million net loss for the third quarter on $739 million in revenue, compared with $4.2 million in net income on $764 million in revenue for the third quarter of 2015. 

The company ended the quarter providing or administering medical coverage for 1 million people, or about 6 percent fewer than a year earlier.

The company had 522,994 enrollees in commercial plans, 113,950 in Medicare plans and 402,358 in Medicaid plans.

The company faces a much different operating environment than mainland U.S. insurers face.

HHS decided to exempt U.S. territories from many ACA mandates because Congress failed to provide the kind of financial support for the territories that it provided for the states.

The government of Puerto Rico has been facing severe financial problems. Triple-S includes this warning in its quarterly report: “If the liquidity of the government of Puerto Rico, its agencies, municipalities and public corporations becomes significantly affected as a result of their inability to raise funding in the market or generate enough revenues, we may face credit losses in our premium and fees receivables from these and other government related entities,” the company says.

The company also repeated a warning that it made earlier, that it depends on a small number of government contracts to generate much of its revenue.

But the government of Puerto Rico continued to pay for health care programs during the third quarter, and Bobby Garcia, the president of Triple-S, said one risk factor that could have hurt the company’s performance, the Zika virus, had no significant financial effect.

Puerto Rico has had 31,464 reported cases of Zika, including 2,469 affecting pregnant women, but it’s only had one known birth of a baby with Zika-related microcephaly, and that baby was not covered by a Triple-S plan, Garcia said.

Triple-S is trying to manage Zika virus risk with an education program, and by offering access to intrauterine birth control devices with no deductible, Garcia said.


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