In its third-quarter earnings report, Aetna said its net income increased 39% to $838 million compared to a year ago. Revenues dropped by 5% to just under $15 billion, which was linked partially to pulling out of the Affordable Care Act (ACA) exchanges. Aetna expects to lose about $200 million in the individual insurance market this year.
Aetna officials reported strong third-quarter results that led to net income of $1.7 billion and adjusted earnings of $2.9 billion for the first nine months of the year.
Aetna CEO Mark Bertolini said Tuesday that he will not comment on the reported CVS Health acquisition discussions.
Shawn M. Guertin, Aetna EVP and CFO, said the company’s strong quarter was “driven by disciplined pricing, moderate medical cost trend and focused execution.” In response to the positive earnings report, Guertin said Aetna will increase its full-year 2017 earnings projections.
Aetna also raised its outlook following positive second-quarter earnings earlier this year. Much like the third quarter, Aetna reported mostly positive results in the second quarter except for a drop in revenue. The last two quarters were an improvement over the first quarter, which included a $381 million loss that Aetna blamed on the failed merger with Humana.
For the third quarter, Aetna’s medical membership increased slightly in the quarter to a little more than 8 million members. That number includes more than 4.5 million members in commercial plans, nearly 1.5 million members in Medicare Advantage and another 1.3 million in Medicaid plans.
Aetna picked up about 100,000 Medicare Advantage members over the past year, while losing more than 100,000 members in commercial plans and 300,000 in Medicaid plans compared to last year.
Despite Aetna’s positive third quarter, most industry insiders are more interested in CVS Health’s possible acquisition of Aetna. CVS is reportedly in talks to buy Aetna for $200 a share, or about $66 billion. The deal could create a company second only to Walmart in terms of revenue in the U.S.
A deal for Aetna would have ramifications across multiple areas of healthcare. The purchase would give CVS a health insurer, in addition to their retail business, pharmacy benefit management services and retail clinics. CVS is already the pharmacy benefit services manager for Aetna and also recently agreed to provide those services for Anthem beginning in 2020.