Both Aetna and Cigna have reported earnings this week and both paint a pretty surprisingly bad picture. Both of them have had falling revenues as rising health care costs and the decline in the overall economy has left millions more Americans unable to afford health insurance coverage.
Anyone that thinks it is the health insurance industry that is ruining our health care system is quite plainly uninformed. Someone is certainly guilty, but I am quite certain it is not the health insurance companies.
Cigna Corp. swung to a fourth-quarter profit as the picture for health-plan enrollment showed signs of improvement.
The Philadelphia-based insurer reported a profit of $330 million, or $1.19 a share, compared with a net loss of $209 million, or 77 cents a share, a year earlier caused by losses in the legacy reinsurance business. Revenue declined 4.2% to $4.6 billion.
While overall enrollment in the company’s health plans followed the downward trend reported by other insurers, membership in Cigna’s highly profitable business of fully insured corporate plans started to grow on a quarter-to-quarter basis for the first time since mid-2008.
Aetna Inc.’s fourth-quarter earnings fell 15%, despite prior-year investment losses, as the health insurer continued to feel the effects of inadequate pricing that battered its underwriting margins.
The Hartford, Conn., company also projected a decline in 2010 earnings. The outlook follows a rocky 2009 in which Aetna’s medical costs outpaced premium increases, and the industry felt pressures from the broad economic downturn.
Aetna continues to see 2010 as a “repositioning year,” Chairman and Chief Executive Ronald Williams said on a conference call Friday.
