Aetna profit rises 52%; shares hit all-time high

Austin American-Statesman - - COMMUNITY NEWS - By Tom Mur­phy

Aetna’s sec­ond-quar­ter profit jumped 52 per­cent to top expectations, and the na­tion’s third-largest health in­surer raised its 2017 fore­cast again, this time well be­yond an­a­lyst pro­jec­tions.

In­vestors re­sponded by push­ing com­pany shares to an­other all-time high price in Thurs­day trad­ing.

Aetna added some Medi­care cus­tomers and grew the health cov­er­age it pro­vides for large em­ploy­ers, but a pull­back from the Af­ford­able Care Act’s health in­sur­ance ex­changes also helped its busi­ness im­prove com­pared to last year’s quar­ter.

The Hart­ford, Conn., in­surer’s big­gest ex­pense — health care costs — fell and the per­cent­age of pre­mi­ums it pays in med­i­cal claims im­proved as Aetna slashed its par­tic­i­pa­tion in the law’s ex­changes to four states from 15 last year. The in­surer still ex­pects to lose more than $200 mil­lion be­fore taxes this year on ACA-com­pli­ant cov­er­age. But that’s bet­ter than the ap­prox­i­mately $300 mil­lion it lost last year.

Aetna once cov­ered more than 900,000 peo­ple through the ex­changes, which amount to a small slice of its over­all busi­ness. But the com­pany and sev­eral other na­tional in­sur­ers have scaled back their pres­ence in the Obama-era law’s mar­ket­places, where they have strug­gled with a sicker-than-ex­pected pa­tient pop­u­la­tion and not enough healthy cus­tomers. Aetna cov­ered about 180,000 peo­ple through the ex­changes at the end of the sec­ond quar­ter and in­tends to leave that mar­ket next year.

Health in­sur­ance is Aetna’s main busi­ness, and most of its en­roll­ment comes from cov­er­age sold through em­ploy­ers or di­rectly to in­di­vid­u­als.

The in­surer’s quar­terly earn­ings jumped to $1.2 bil­lion, from $791 mil­lion last year.

Aetna also said Thurs­day that it now ex­pects ad­justed earn­ings of be­tween $9.45 and $9.55 per share for the year, a big hike from its pre­vi­ous fore­cast for $8.80 to $9 per share.

Aetna shares jumped past $160 Thurs­day morn­ing to set a new high; they closed at $158.54, up $2.46, or 3.8 per­cent.

The fed­eral gov­ern­ment has re­turned to a Penn­syl­va­nia vil­lage that be­came a flash­point in the na­tional de­bate over frack­ing to in­ves­ti­gate on­go­ing com­plaints about the qual­ity of the drink­ing wa­ter.

Gov­ern­ment sci­en­tists are col­lect­ing wa­ter and air sam­ples this week from about 25 homes in Di­mock, about 150 miles north of Philadel­phia.

“Take a skunk and ev­ery house­hold chem­i­cal, put it in a blender, puree it for five min­utes and take a whiff,” said Di­mock res­i­dent Ray Kem­ble, 61, de­scrib­ing the smell of his well wa­ter. “It burns the back of your throat, makes you gag, makes you want to puke.”

He said in­ves­ti­ga­tors from the Agency for Toxic Sub­stances and Dis­ease Reg­istry, a fed­eral pub­lic health agency, were at his house Mon­day to col­lect sam­ples.

Frack­ing is a drilling method that uses huge amounts of pres­sur­ized wa­ter, sand and chem­i­cals to ex­tract oil and nat­u­ral gas from rock for­ma­tions.

Di­mock was the scene of the most highly pub­li­cized case of meth­ane con­tam­i­na­tion to emerge from the early days of Penn­syl­va­nia’s nat­u­ral gas-drilling boom. State reg­u­la­tors blamed faulty gas wells drilled by Cabot Oil & Gas Corp. for leak­ing com­bustible meth­ane into Di­mock’s ground­wa­ter.

Cabot has con­sis­tently de­nied re­spon­si­bil­ity, say­ing meth­ane was an is­sue in the ground­wa­ter long be­fore it be­gan drilling.

“Nu­mer­ous sets of data col­lected over the past sev­eral years in Di­mock, by both EPA and DEP, have con­firmed there is no threat to hu­man health and the en­vi­ron­ment,” said com­pany spokesman Ge­orge Stark.

The Agency for Toxic Sub­stances and Dis­ease Reg­istry said Thurs­day it is test­ing the wa­ter for bac­te­ria, gases and chem­i­cals. The agency is also test­ing in­door air for radon. Sam­pling re­sults are ex­pected in the fall,.

“Res­i­dents have con­tin­ued to raise con­cerns about nat­u­ral gas ac­tiv­i­ties im­pact­ing their pri­vate wa­ter well qual­ity,” the agency said in a state­ment. It said the in­ves­ti­ga­tion will “de­ter­mine if there are drink­ing wa­ter qual­ity is­sues that may con­tinue to pose a health threat.”

AS­SO­CI­ATED PRESS 2012

Ray Kem­ble, of Di­mock, Pa., holds a jug of his well wa­ter while march­ing with demon­stra­tors against hy­draulic frac­tur­ing in Philadel­phia in Septem­ber 2012. “It burns the back of your throat, makes you gag, makes you want to puke,” Kem­ble said this week of the wa­ter he says was con­tam­i­nated by gas drilling.

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