Insurer profits through the roof
Act requires insurers, beginning this year, to spend 80% to 85% of member premium dollars on direct medical care and quality improvement activities.
Starting in 2012, insurers must give members rebates for the difference if they do not meet these medical-loss ratios. Insurers reported ratios at or within reach of the federal requirements, and said they do not expect the rebates to significantly affect their bottom lines.
For instance, Michael Wiederhorn, analyst at Oppenheimer, wrote in an investor note that although definitions on the rebates are still being evaluated, “we believe the impact will be negligible” for Aetna.
Some insurers reported enrollment growth among young adults, spurred by a provision in the federal reform law requiring employers to allow young adults up to age 26 to be added to their parents’ health plans. The provision went into effect Sept. 23, 2010, though most employers did not have to add the new dependents to their rolls until January. WellPoint reported that the provision added nearly 292,000 new members in the first quarter, to a total of nearly 34.2 million members nationwide.
WellPoint and Aetna also touted their accountable care organization pilot programs, and expressed a commitment to expanding these new relationships with providers. Aetna, which in March announced an ACO initiative with the Carilion Clinic in Roanoke, Va., is “determined to be a leader” in this area, Mark Bertolini, chairman, CEO and president of Aetna, said during an investor call. 1st quarter net earnings
million % increase over a year ago