UPDATE: Aetna has announced it will not be offering ACA exchange plans in Virginia for 2018. The only two states where it will continue to participate in 2018 are Delaware and Nebraska.
Dive Brief:
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Aetna announced a first-quarter net loss of $381 million, which company officials called a “strong start to the year despite costs associated with the termination of the Humana merger agreement, which was the primary driver of the first-quarter 2017 net loss.”
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The earnings report comes months after Aetna, which has 22.4 million medical members, attempted to purchase insurance company Humana in a $37 billion deal. A U.S. District Court judge blocked the merger in July 2016, and the two companies dropped the merger plan in February.
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Aetna Chairman and CEO Mark T. Bertolini said in an earnings statement the company increased investment in “growth initiatives” and has raised its full-year 2017 earnings per share projections, despite the failed merger with Humana. Aetna EVP and CFO Shawn Guertin pointed to examples of the company's strength, including improved “shareholder dividend" earlier this year.
Dive Insight:
Though Aetna reported a loss, the company said the financial performance still beat projections. Another major payer, Anthem, also recently reported beating financial projections. Unlike Aetna though, Anthem announced that it made $1 billion in the first quarter and recommitted to staying in the ACA exchanges market.
Meanwhile, Aetna said in April that it’s leaving the ACA exchanges market in Iowa after this year. Last year, Aetna pulled out of 11 state ACA exchanges. In April, the insurer announced its plan to leave the Iowa exchange market. It still offers exchange plans in Delaware and Nebraska, but is evaluating whether to continue in those markets.
In February, Bertolini raised eyebrows when he said ACA exchanges were in a “death spiral” and predicted more payers would pull out.
Success in the ACA exchanges doesn't serve as a bell weather as to whether a payer succeeds, but it's interesting to see two major insurers taking different paths. While Anthem is looking to continue in the ACA exchanges, Aetna is moving away from exchanges plans.
We'll see if Anthem continues to report strong earnings and whether Aetna will be able to show positive gains in the next quarter with the failed merger in its rearview mirror.