Aetna takes loss after failed Humana bid
Aetna booked a $381 million, first-quarter loss mainly due to its failed bid for rival Humana, but the nation’s third largest health insurer still beat earnings expectations and raised its 2017 forecast.
The company said Tuesday that it is relying more on government-funded Medicaid and Medicare Advantage coverage while also cutting back on troublesome products like individual insurance that complies with the Affordable Care Act.
Aetna and other insurers have been expanding their government business in recent years as more people become eligible for Medicare Advantage plans that care for those over age 65 and as state governments turn to insurers to manage Medicaid programs that help the poor.
Premiums collected from that business jumped 9 percent to more than $7 billion for Aetna in the quarter, surpassing commercial coverage for the first time. Chairman and CEO Mark Bertolini told analysts that government business continues to be “the predominant driver of our growth.”
Overall, Aetna reported earnings of $2.71 per share, adjusted for one-time gains and costs, on $15.24 billion in operating revenue, which excludes investment income. Analysts expected adjusted earnings of $2.36 per share on $15.48 billion in revenue, according to Zacks Investment Research.