Aetna swings to first-quarter profit on Medicare membership gains
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Aetna swung to a profit in the first quarter of 2018 as the insurer reported membership gains in its Medicare Advantage business along with lower overall medical costs.
Net income totaled $1.2 billion in the three months ended March 31, compared with a loss of $381 million during the same quarter of 2017 related to its failed attempt to merge with Humana.
Hartford, Conn.-based Aetna has long since moved on from Humana and is now vying to merge with drugstore and pharmacy benefit manager CVS Health in a deal worth $69 billion. The Justice Department is reviewing the deal.
"We are pleased with our strong start to the year and remain focused on our business priorities as we plan for our projected combination with CVS Health in the second half of 2018," Aetna CEO Mark Bertolini said in a statement.
Aetna is not holding its usual conference call to discuss financial results in light of the pending CVS merger.
Aetna recorded first-quarter revenue of $15.3 billion, a 1.1% increase over $15.2 billion the same quarter a year ago.
The insurer grew membership in its Medicare Advantage plans by 19.3% to 1.7 million compared with 1.4 million in the first quarter of 2017.
"Our Medicare growth strategy remains on track as we grew to serve nearly 250,000 additional Medicare Advantage members in the first quarter," Bertolini said in a statement.
But membership declined in Aetna's commercial and Medicaid plans. Its commercial membership dipped slightly to 17.8 million at March 31 from 17.9 million a year ago. Aetna stopped selling Affordable Care Act-compliant individual insurance plans this year, citing financial losses. Aetna's Medicaid membership was 1.8 million in the quarter, down 23.2% year over year.
Overall, Aetna's membership totaled 22.1 million in the quarter, down 1.5% from 22.4 million during the first quarter last year.
Aetna's medical loss ratio totaled 80.4% across all business lines, compared with 82.5% during the first quarter of 2017. The decrease stemmed from Aetna's exit from the individual insurance market in 2018 as well as the reinstatement of the health insurer fee this year.
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