The company’s selling expense amount for health insurance fell to $363 million in the latest quarter, down 8.1% from the amount for the fourth quarter of 2016.
The selling expense amount for group life insurance, group disability insurance and other non-major-medical group products fell 71%, to $11 million.
The overall selling expense total fell 14%, to $374 million.
The Hartford, Connecticut-based company included those figures in a financial update it filed with the U.S. Securities and Exchange Commission. A copy of the update is available here.
Aetna is reporting $254 million in net income for the latest quarter on $15 billion in revenue, compared with $128 million in net income on $16 billion in revenue for the fourth quarter of 2016.
The company ended the year providing or administering health coverage for 22 million people, down from 23 million a year earlier.
Commercial, insured: Fell to 4.5 million, from 5.6 million
Commercial, self-insured: Increased to 13.6 million, from 13.1 million
Medicare Advantage: Increased to 1.5 million, from 1.4 million
Medicare supplement insurance: Increased to 740,000, from 685,000
Medicaid: Fell to 1.9 million, from 2.5 million
Aetna did not break out enrollment numbers for fully insured individual and small-group coverage, but it said the number of enrollees with those types of coverage was down.
Spending on employee severance pay and other restructuring costs fell to $60 million in the latest quarter, from $404 million in the year-earlier quarter.
(Photo: Douglas Healey/AP)
Aetna says the restructuring costs recorded for the latest quarter are the result of “expense management and cost control initiatives.”
Like other companies, Aetna is determining how the new Tax Cuts and Jobs Act of 2017 (TCJA) will affect its finances.
Aetna says it expects the TCJA to cut its tax bills by about $800 million in 2018, and that the Affordable Care Act minimum medical loss ratio rules will require it to pass about $400 million of that savings along to major medical plan enrollees.
Hartford Financial Services Group Inc. acquired Aetna’s group life and group disability insurance business through a reinsurance arrangement in November.
CVS Corp. then agreed to acquire Aetna.
Aetna notes that parts of its earnings look different this quarter because of the Hartford deal.
The company usually holds a conference call to discuss its quarterly earnings announcements with securities analysts. This quarter, Aetna did not hold a conference call, because it does not want to hold a call while the CVS deal is pending.
Mark Bertolini, Aetna’s chairman, said in a statement about the results that the company’s core businesses did well in 2017.
“As we progress toward completing our pending transaction with CVS Health, we remain focused on serving our members and delivering on our strategic and financial objectives,” Bertolini said in the statement. “We are confident that the combined entity will deliver a better health care experience by improving access to affordable health care and coordination of health services in communities across the country.”
—Read HealthCare.gov Volume Flattens Out on ThinkAdvisor.