- Health insurer Aetna announced Tuesday its total Medicare Advantage membership grew by almost 250,000 in Q1 2018 to a total of about 1.72 million.
- Aetna posted profits of $1.2 billion in Q1 2018 compared to a loss of $381 million during the same period last year. The company said the difference was primarily attributable to costs associated with the failed Humana merger attempt and the favorable impact of the tax bill signed into law last year.
- The company, which is attempting to merge with CVS Health, says that it still expects the $69 billion deal to close in the second half of this year.
Aetna’s medical cost ratio decreased to 80.4% from 82.5% in Q1 2017 due to the re-instatement of the Affordable Care Act's health insurer fee and its exit from the individual insurance market. The company also pointed to higher medical costs because of the severe flu season as a negative factor.
"Our first quarter operating results were largely in line with our expectations as favorable prior years’ reserve development more than offset higher than projected flu related medical costs,” Aetna CFO Shawn Guertin said in a statement.
Despite the growth in the insurer’s Medicare Advantage membership, its commercial and Medicaid membership fell in Q1. Overall, Aetna’s medical membership totaled about 22.1 million at the end of Q1, a slight decrease from Q4 2017’s 22.2 million.
Aetna is following a trend, as more payers are looking to boost efforts in the Medicare Advantage market due to its stability.
The insurer’s effective tax rate dropped to 16.8% in Q1 2018 compared to 39.6% in the same period last year.
Aetna did not hold a conference call due to the pending CVS merger.