Q3: Big five insurers post positive results, but struggle on exchanges

Now that the "big five" U.S. health insurers have all released their third-quarter earnings, it's clear that while the companies reported plenty of positive news, most are experiencing challenges in the individual market.

Here's a brief rundown of some of the highlights from the country's major payers, four of which are have pending merger deals:

  • UnitedHealth's overall Q3 revenue grew 27 percent year over year to $41.5 billion, and revenue from its Optum health services unit jumped 61 percent to $19.3 billion in Q3. Its overall third-quarter earnings came in at $1.6 billion. While the insurer will expand to 11 new public exchange markets in 2016, the report does note that its earnings growth, fueled by enrollment and price increases, "is partially offset by a continuing market trend toward lower price point products, including public exchange offerings."
  • Aetna reported operating earnings of $688.6 million--a 6 percent per share increase from the same quarter last year. Its net income for the third quarter was $560.1 million, or $1.59 per share. Based on these results, the insurer raised its 2015 operating earnings projection per share for the fourth time this year. Yet Aetna did acknowledge "challenges" in the individual market, even as CEO Mark Bertolini noted that "we think it's way too early to call it quits on the ACA and on the exchanges."
  • Anthem posted a third-quarter profit of $654.8 million, or $2.43 a share, up from the $630.9 million ($2.22 a share) it reported in Q3 of 2014. Overall, the company touts continued enrollment growth in its commercial and government business lines, noting its medical enrollment increased by 174,000 members in the quarter. But "our individual business continues to lag as a result of lower than expected enrollment," CEO Joseph Swedish acknowledged on a call with analysts.
  • Humana reported consolidated revenues of $13.36 billion, a 9 percent increase from the same quarter in 2014, noting that it added more members to its Medicare Advantage business. But the individual business also presented challenges for the insurer, as it announced in the earnings report the "discontinuance of certain products as well as market exits for 2016, with approximately 100,000 current members expected to be impacted." The company attributed the move to high benefit ratios for individual plans due to designs that attracted a higher-utilizing member base than it predicted.
  • Cigna, citing overall customer growth, increased operating expense efficiencies and margin improvement in its MA business, and reported consolidated revenues of $9.4 billion in Q3, which is an increase of 7 percent compared to the same quarter last year. While membership in the company's government plans rose 8.5 percent, Cigna said its revenue growth in 2016 could be offset by an expected reduction in individual market and Medicare Part D customers.

Across the board, health insurers have adjusted their offerings on the ACA exchanges for 2016, offering more plans with narrow networks and fewer preferred provider organization plans, FierceHealthPayer has reported. In the second quarter, the big five insurers posted better-than-expected earnings. 

To learn more:
- here's UnitedHealth's earnings report
- here's Aetna' earnings report
- here's Anthem's earnings report
- here's Humana's earnings report
- here's Cigna's earnings report

Related Articles:
Aetna's third-quarter earnings rise
Enrollment growth boosts Anthem's 3Q profits
Q3 results show Optum continues to serve UnitedHealth well
Cigna cites higher consolidated revenues in Q3 earnings
UnitedHealth plans further expansion into ACA exchange market
Humana cuts back on ACA exchange plan offerings
Q2: Big 5 insurers report better-than-expected earnings

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