Aetna profits up on member, premium increases

Aetna has announced that its second-quarter profits have gone up 6.4 percent for its second quarter, courtesy of both rising membership numbers and a raise in premiums. The company earned $480.5 million during its second quarter, compared with profit of $451.3 million during the same period the previous year. The profit increase was fueled by a growth in revenue, which rose 15 percent to $7.83 billion from $6.79 billion.

So, how did it pull off these results? Clearly, one factor was its respectable medical benefit ratio, i.e. the percentage of each dollar of premium it spends on healthcare costs. The ratio was 81.9 percent this quarter, compared with 81.5 percent in the same quarter last year. Meanwhile, medical membership rose 0.2 percent from the first quarter to 17.5 million.  

According to the Wall Street Journal, many analysts see Aetna as the best-positioned player in the managed care business. Unlike its peers, Aetna hasn't had to cut earnings forecasts, and it expects further membership growth.

To learn more about Aetna's performance:
- read this Associated Press piece
- read this Wall Street Journal article (sub. req.)

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