WellPoint, Aetna Report Higher 3rd Quarter Profits
Insurers WellPoint and Aetna are reporting higher profits in the third quarter, which they attribute in part to reduced health care costs.
The Associated Press/Washington Post: "The use of health care services tumbled in the third quarter, helping insurers report better-than-expected earnings and raise their 2010 profit forecasts. But people haven't stopped seeing the doctor; they're just filing fewer claims than they did last year, when the unemployed were drawing on subsidized health insurance and the flu was more prominent [than it's] been this year. 'In general, utilization is not in and of itself falling off the charts,' said Wayne DeVeydt, chief financial officer for WellPoint Inc., which operates Blue Cross Blue Shield plans in 14 states. 'It's more a function of what you saw last year being abnormally high and this year being normal'" (Murphy, 11/3).
The Wall Street Journal: "WellPoint Inc.'s third-quarter profit rose 1.2% in the absence of year-earlier write-downs. But claims costs as a portion of revenue rose, in contrast with much of the health-insurance industry. The largest managed-care company in the U.S. by membership on Wednesday reported higher-than-expected enrollment, saying group-plan attrition moderated and unfavorable employment in its commercial segment stabilized. Like other health insurers, WellPoint has seen lower-than-expected use of medical services this year. But unlike its peers, WellPoint reported an increase in medical expenses as a percentage of premium revenue. That figure, known as the medical-loss ratio, rose to 83.8% from 82.1% a year earlier, driven by seniors and individual plans" (Brin, 11/4).
Los Angeles Times: "Aetna Inc., the third-largest insurer by enrollment, had $497.6 million in profit, or $1.19 a share, in its latest quarter, up from $326.2 million, or 73 cents, last year. Net income rose 53%. ... Aetna Chief Executive Ronald A. Williams said in a statement that the Hartford, Conn., insurer had outpaced an 'unusually weak 2009' so far this year. 'Our strong operating results were driven by a reduction in utilization of health care services after the surge we saw in 2009, combined with appropriate pricing and effective medical quality and cost management,' Williams said" (Helfand, 11/4).
Meanwhile, several more insurers are requesting higher premium rates.
Seattle Post Intelligencer: In Washington State, "Regence BlueShield has requested another rate hike for individual health plans to take effect just three months after it raised rates by double digits. In documents filed with the state last week, the insurer requested an average premium increase of 3.7 percent for individual plans starting Jan. 1. That comes on the heels of 16.4 percent rate hike on Oct. 1. Regence blamed its latest request, which has not yet been approved by the state, on health care reform. Specifically, it cited mandates to add preventive care benefits, remove lifetime benefit limits, and cover kids with pre-existing conditions. The state has 60 days to review the rate request" (Ho, 11/3).
Hartford Courant: "Anthem Blue Cross and Blue Shield in Connecticut, the state's largest health insurer, is seeking an average 20 percent increase for a large segment of customers who buy coverage on the individual market. The state Department of Insurance said Wednesday that it will hold a hearing later this month on Anthem's proposed rates, which would take effect Jan. 1" (Sturdevant, 11/3).