Managed-care company Aetna said its first-quarter profit rose slightly due to membership gains and premium increases, even though the company saw higher-than-expected medical costs.
The Hartford, Conn.-based insurer saw its profit rise 1% to $437.8 million, or 95 cents per share, compared with $431.6 million, or 85 cents per share, in the same quarter last year.
Revenue, which excludes investment losses, rose 11% to $8.6 billion.
Medical costs rose 14% to $5.8 billion. Company officials attributed that to the impact of layoffs and membership increases due to the federal law commonly known as COBRA, which helps people who lose their jobs keep temporary health coverage from their employer.
A new federal subsidy that picks up 65% of the cost of COBRA coverage for people who lose their jobs began late in the quarter, but it's unclear whether that had an effect.
Aetna also saw its members use more medical services per person, but spokesman Fred Laberge said it was hard to determine whether that was tied to the recession.
Total medical membership rose 9% to more than 19 million people. The insurer added large national accounts for Bank of America and Home Depot during the quarter.
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