Aetna Understated Profits, Overhead, Lawmakers Say
Insurers' profits are a lightning rod for reform advocates. Aetna's earnings have now attracted reprimand from Senate Democrats who say the major insurance company overstated it spending on patient care in regulatory filings, minimizing profits and overhead, The Wall Street Journal reports. "The Senate Committee on Commerce, Science and Transportation launched an investigation last summer into the percentage of premiums insurers spend on medical care versus profits and other administrative expenses. That percentage, known in the industry as 'the medical-loss ratio,' is watched closely by detractors who say insurers take too much money from the system in profits. In a statement Monday, the committee said Aetna overstated by $4.9 billion the amount of money it spent on patient care for small businesses. As a result, the insurer's medical-loss ratio for small businesses was 79%, not the 82% Aetna initially reported, it said, drawing attention to a correction that Aetna had made to its filings last week."
Aetna corrected its filings "proactively" in an amended report on Dec. 2. A spokesperson said staff had been alerted to the accounting "errors" and would not repeat the mistake (Johnson, 12/8).