Strong membership growth and low healthcare utilization helped Cigna (NYSE: CI) and Humana (NYSE: HUM) both post better-than-expected earnings for the second quarter.
Cigna, which reported a 39 percent earnings increase, multiplied its membership by 5.3 percent to 12.6 million from a year earlier, with an increase of 88,000 in the second quarter alone. Meanwhile, its medical claim expenses decreased 2 percent, according to the Wall Street Journal.
The insurer reported a profit of $408 million, or $1.50 a share, up from $294 million, or $1.06 a share, a year earlier. Total revenue was up to $5.5 billion for the quarter compared with $5.35 billion last year, the Hartford Courant reports.
Humana also reported an increase in profits--a 35 percent surge in the second quarter--as new members joined its Medicare plans and existing members used fewer healthcare services.
Membership in Humana's stand-alone Medicare prescription drug plans was up 41 percent from a year ago at 2.4 million members, primarily because of its partnership with Wal-Mart. And membership in Humana's individual specialty plans, which include vision and dental coverage, was up 55 percent from last year, the Associated Press reports.
Humana's second-quarter net income rose to $460.3 million from $340.1 million a year ago, and revenue rose 8 percent to $9.28 billion, according to Reuters. The health plan also reported a 73 percent rise in income from its health and wellbeing services segment due to growth in its pharmacy business and its purchase of Concentra.
Based on these results, Humana CEO Michael B. McCallister said the company now sees opportunities to expand its 2012 Medicare businesses "a little more aggressively than we thought possible 90 days ago."