May 1, 2018

Aetna’s 1Q profits surge

PHOTO | HBJ File
PHOTO | HBJ File
Aetna's Hartford headquarters.

Hartford health insurer Aetna, which is being acquired by CVS Health for $69 billion, said Tuesday its first quarter profits rose mainly due to lower medical costs.

For the quarter ended March 31, Aetna reported net income of $1.2 billion, or $3.67 a diluted share, vs. a net loss of $381 million, or $1.11 a diluted share, from the year-ago period.

The health insurer's adjusted earnings for the first quarter were $1.1 billion, or $3.19 per share.

Aetna posted first-quarter revenue of $15.3 billion compared to $15.2 billion in 2017.

The company posted an improved medical benefits ratio of 80.4 percent vs. 82.5 percent a year ago. The ratio, or MBRs, account for the percent of premiums spent on claims.

Shawn M. Guertin, Aetna's executive vice president and CFO, said the first-quarter results "largely" aligned with its expectations.

Aetna Chairman and CEO Mark T. Bertolini said Aetna grew to serve almost 250,000 new Medicare Advantage members in the first quarter. The company, Bertolini said, is encouraged by the strong start to the fiscal year and is focused on its merger with CVS Health, which he expects to close in the second half of 2018.

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