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Aetna 3Q profit grows 18 percent on enrollment

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[October 29, 2009]  NEW YORK (AP) -- Health insurer Aetna Inc. said Thursday its third-quarter profit rose 18 percent on gains in both commercial and Medicare enrollment.

HardwareStill, operating earnings slipped 43 percent on lower commercial plan underwriting margins. A boost in premiums was not enough to offset a rise in medical costs.

The managed care company said it earned $326.2 million, or 73 cents per share, up from $277.3 million, or 58 cents per share, in last year's third quarter. Revenue grew 9 percent to $8.7 billion from $7.98 billion.

Operating earnings, which exclude capital gains and other items, fell 43 percent to $308.2 million, or 69 cents per share.


The results topped Wall Street expectations for operating earnings of 66 cents per share on $8.68 billion in revenue.

Aetna's commercial enrollment grew 6.8 percent in the quarter, including employer-sponsored health coverage and individual policies. Total medical enrollment grew 7.7 percent.

Overall, enrollment has been decreasing throughout the health insurance sector as employers cut jobs, reducing the number of people covered under employer-sponsored plans. Aetna managed to buck the trend again during the third quarter, following a similar enrollment increase during the second quarter.

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Aetna rivals UnitedHealth Group Inc. and WellPoint Inc. both recently said they saw enrollment declines in the third quarter. They also were hit with rising costs related to swine flu treatments.

Aetna's commercial medical benefit ratio, which measures the percentage of premiums paid to cover medical claims, rose to 85.6 percent from 80.3 percent a year ago.

Aetna, based in Hartford, Conn., said it expects full-year operating earnings per share of $2.75. In July, it forecast operating earnings of $2.75 to $2.90 per share, which was down from prior guidance of $3.55 to $3.70 per share.

[Associated Press]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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