Aetna Inc. announced a 16 percent jump in profits for its second quarter last week as the insurer capitalized on premium and fee increases, membership growth, cost containment and higher investment income.
The Hartford-based company reported profits of $451.3 million, or 85 cents per share, compared with earnings of $389.5 million, or 67 cents per share during the same period last year.
Revenue for the three months ended June 30 increased to $6.79 billion, up nearly 9 percent from $6.25 billion in the same quarter last year.
Per-share earnings beat the estimate of 80 cents by analysts polled by Thomson Financial.
Aetna said it expects full-year earnings per share of $3.40-$3.42 and third quarter per-share earnings of between 90 cents and 92 cents.
“We continue to win in the marketplace by offering high-quality products and services that customers want as we invest in technology that helps deliver better cost and quality outcomes for our members,” Ronald Williams, chief executive, said in a statement that accompanied the earnings report.
In its core health care business, Aetna reported net income of $403.1 million in the quarter, a 37.5 percent increase from $293.2 million in the same quarter last year. The health care business provides medical, dental, pharmacy and behavioral health products and services.
Aetna reduced slightly the percentage of spending to pay for health care costs, reporting a total medical benefit ratio of 81.5 percent in the quarter, compared with 81.9 percent in the same quarter last year.
Total medical membership was 15.76 million as of June 30, up slightly from 15.7 million three months earlier. Pharmacy membership also increased in the quarter, but dental membership dropped by 470,000, to 13.18 million from March 31 due to the loss of a customer with network access to dental providers.
Williams said its agreement in the second quarter to pay $535 million to purchase Phoenix-based Schaller Anderson, which manages health care for Medicaid plans and administers employers’ self-funded health plans, will diversify Aetna’s products and improve its local market presence.
“This acquisition will position Aetna as a significant player in the Medicaid market and give us an additional avenue for profitable growth,” Williams said.
