Aetna bolsters CVS Health’s bottom line

Earnings for major health insurers for the three months ended Dec. 31. Percentage changes are relative to the same period in 2018.

Centene Corp. | St. Louis THE NUMBERS

$18.9 billion Revenue, up 13.9%

$18.6 billion Operating expenses, up 14.9%

$202 million Net income, down 16.2%

15.2 million Membership, up 7.6%

88.4% Medical-loss ratio, up 1.6 percentage points

TAKEAWAY

Centene reported higher revenue in the fourth quarter of 2019, driven by membership growth in the health insurance exchanges and expanded and new Medicaid contracts in several states. However, Centene lost membership in Medicare Advantage. CEO Michael Neidorff said he expects the acquisition of WellCare Health Plans, which closed on Jan. 23 and is not included in the financial results, to help “reset the trajectory” of that business.

Cigna | Bloomfield, Conn. THE NUMBERS

$38.2 billion Revenue, up 167.4%

$36.7 billion Expenses, up 167%

$984 million Net income, up 569.4%

17.1 million Medical membership, up 1.1%

82.3% Medical-loss ratio, up 1.4 percentage points

TAKEAWAY

Cigna’s giant increases in fourth-quarter revenue and net income were driven by an influx of pharmacy revenue from its acquisition of pharmacy benefit manager Express Scripts at the end of 2018. The insurer also grew premium revenue and fees in its health insurance segment, thanks to new commercial-employer customers and premium increases to cover costs. Cigna attributed the higher medical-loss ratio to increased medical costs among its individual customers, as well as the suspension of the health insurer fee.

CVS Health | Woonsocket, R.I. THE NUMBERS

$66.9 billion Revenue, up 22.9%

$63.9 billion Operating costs, up 19.1%

$1.7 billion Net income, up $2.2 billion

22.9 million Aetna medical membership, up 3.7%

85.7% Medical-loss ratio (not comparable)

TAKEAWAY

CVS reported big increases in revenue and profit in the fourth quarter of 2019 over the prior-year period, driven in large part by its acquisition of insurer Aetna in November 2018. Top and bottom lines were also helped by higher prescription volume and brand inflation in its pharmacy benefit management segment and retail pharmacy stores. Aetna’s Medicare Advantage membership soared 32% to 2.3 million.

Humana | Louisville, Ky. THE NUMBERS

$16.3 billion Revenue, up 15%

$15.9 billion Operating expenses, up 16.7%

$512 million Net income, up 44.2%

16.7 million Membership, up 0.5%

86.6% Medical-loss ratio, up 3.2 percentage points

TAKEAWAY

New Medicare Advantage members and higher premiums helped boost Humana’s top line. Individual Advantage membership grew 17% to 3.6 million in the fourth quarter, and group Advantage membership by 6% to 525,300. Individual Advantage growth was the highest the company has seen in a decade, CEO Bruce Broussard said during an earnings call.

Molina Healthcare | Long Beach, Calif. THE NUMBERS

$4.3 billion Revenue, down 8.4%

$4 billion Operating expenses, down 7.1%

$168 million Net income, down 16.4%

3.3 million Membership, down 12.8%

86% Medical-loss ratio, up 0.9 percentage points

TAKEAWAY

Previously announced Medicaid contract losses in Florida and New Mexico weighed down Molina Healthcare’s top line in the fourth quarter. The insurer’s Medicaid membership fell 12% because of the contract losses, but its ACA exchange membership also fell 24.3%. While fourth-quarter profit decreased year over year, Molina said its full-year net income grew 4.2% to $737 million and its full-year margins also grew to 4.4% from 3.7% year over year.