Aetna, Hartford, Conn., said its fourth-quarter profits were 15% lower than in 2008, as the weak economy continued to hammer its results. Aetna said net income was $165.9 million in the quarter, down 14.8% from the year-ago quarter. Revenue increased 9% to $8.7 billion. For the full year, Aetna reported net income of $1.3 billion, down 7.8% from 2008. Revenue increased 9.7% to $34.7 billion.
Weak economy weighs on Aetna's profits
In its healthcare segment, which represented more than 90% of its 2009 revenue, Aetna said that medical cost ratios on its commercial business hampered operating income because of higher claim intensity, the costs associated with H1N1 flu and higher COBRA participation in the fourth quarter ended Dec. 31, 2009. Favorable adjustments to prior-period cost estimates of $59 million were basically offset by increases to cost reserves initially announced in the second quarter of 2009. Premium revenue for the quarter increased by 9% compared with 2008's fourth quarter, thanks to membership growth and premium increases.
“2010 is a year of repositioning for the business,” Ronald Williams, chairman and CEO, said. Williams also called for a bipartisan approach to healthcare reform during his prepared remarks, because “the fundamental trends and underlying issues driving the need for meaningful healthcare reform continue.”
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