Q1 earnings: A mixed bag for 'big five' health insurers

The first quarter of 2016 brought both positive and negative tidings for the nation's five largest health insurers.

In perhaps the most closely watched business segment, the individual market, two of the "big five" told investors that they would pull out of some marketplaces in 2017, while others indicated they'd stay the course. Meanwhile, Anthem and Cigna appear to disagree on when they predict their merger to close.

Here's a breakdown of the major insurers' Q1 results and other revelations from the insurers' earnings calls:

UnitedHealth reported a net income of $1.6 billion, up from $1.4 billion in Q1 2015. Its first-quarter revenues grew 10 percent year-over-year to reach nearly $36 billion, fueled by 54 percent year-over-year revenue growth in its booming healthcare services division, Optum, which executives said is poised for further expansion. However, as it had threatened, United will pull out of all but a "handful" of ACA exchanges in 2017 due to continuing losses in that sector, CEO Stephen Hemsley said during a call.

Anthem's net income dropped 19 percent year-over-year, from $865 million to $703 million, even as its overall earnings outlook for 2016 held steady. Due to higher-than-expected enrollment growth in both its commercial and government business segments, the insurer's overall medical membership rose 2.8 percent compared to Q1 2015. In Anthem's quarterly earnings call, CEO Joseph Swedish indicated the insurer plans to stick it out on the exchanges, saying, "We do believe we're well-positioned for continued growth in the marketplace."

Aetna saw a 7 percent dip in its year-over-year Q1 net income, which went from $777.5 million to $726.6 million. While its operating revenue rose 4 percent compared to Q1 2015, its total medical membership has fallen since the beginning of the year. CEO Mark Bertolini told analysts during the insurer's earnings call that overall he sees the ACA exchanges as a "good investment"--though he also added that he would like to see structural changes such as more product and rating flexibility and multiple risk pools.

Humana's first-quarter net income was $234 million, a 46 percent drop from Q1 2015, and its consolidated revenues dipped only slightly year-over-year, from $13.83 billion to $13.80 billion. While its individual Medicare Advantage membership increased 5 percent over the previous year, its individual commercial membership dropped 21 percent. Following in United's footsteps, the insurer said it would explore "certain statewide market and product exits both on and off exchange, service area reductions and pricing commensurate with anticipated levels of risk by state," to account for its ACA exchange losses.

Cigna reported a Q1 net income of $519 million, down 2.6 percent from the $533 million it earned in the same quarter of 2015. Its adjusted income from operations rose 18 percent year-over-year, however, due to favorable medical and operating costs in the company's global healthcare segment. Perhaps owing to those results, company spokesperson Joe Mondy told FoxBusiness.com in late April that the insurer intends to "selectively expand our public exchange presence into a few new geographies in 2017." In a regulatory earnings filing, Cigna also indicated that its merger with Anthem might not close before the end of 2016, contrary to what Anthem itself has projected.

To learn more:
- here's United's Q1 earnings report
- here's Aetna's report
- here's Anthem's report
- here's Humana's report
- here's Cigna's report
- read the FoxBusiness article

Related Articles:
CEO Stephen Hemsley: UnitedHealth will exit all but a few Affordable Care Act exchanges
UnitedHealth gets 'aggressive' about Optum expansion
Anthem's net income drops 19% in Q1
Aetna's first-quarter net income falls 7%
Favorable medical costs boost Cigna's Q1 performance
Humana mulls exit from some ACA marketplaces
Cigna raises doubts about when deal with Anthem will close
Q4 earnings roundup: Big five insurers' ACA exchange woes deepen