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August 3, 2017

Aetna boasts 52% 2Q profit increase

Wikimedia Commons Aetna's Hartford campus
HBJ File Photo This is a screenshot photo of Aetna CEO Mark Bertolini during an interview with PBS News Hour.

Hartford health insurer Aetna boosted second quarter profits 52 percent as executives touted the company’s strategy to become more consumer-focused while planning for geographic expansion of its Medicare products.

In the quarter ended June 30, Aetna posted net income of $1.2 billion, or $3.60 per share, up from $791 million, or $2.23 per share, a year earlier.

Revenue totaled $15.5 billion in the second quarter, down from $16 billion in the year-ago period, slipping from falling enrollment as the company pulled back from the Affordable Care Act's health insurance exchanges and exited the state of Missouri's exchange. The company said it would exit the 2018 Obamacare insurance market for 2018.

Answering questions during a conference call, CEO Mark T. Bertolini and Shawn M. Guertin, Aetna executive vice president and CFO, said the company is working to be more "consumer-centric."

"It has been a very productive quarter on many fronts," Bertolini said. "We're positioning Aetna as health partner of choice for people looking to advance their health."

Bertolini also took Congress to task for not addressing the “repeal and replace” prospect of the Affordable Care Act and said uncertainty may mark the rest of the year, including the fourth quarter.

“The largest issue is uncertainty and whether or not the legislature will step up to their responsibilities to the people,” he said.

In addition, the company's strategy is to promote growth in Medicare accounts and increase the Medicare population using its services from 56 percent to 60 percent, Bertolini said.

"Medicare is a critical component," Bertolini said.

Long term the strategy is “in the eighties," percentage-wise, he said.

Year to date, the company has served an additional 130,000 Medicare members, which represents 14 percent membership growth as a result of geographic expansion, he said.

Government accounts including Medicare, Medicare Advantage and Medicaid constitute "a more meaningful driver of our overall portfolio," he said.

Bertolini and Guertin also noted that 11,000 people are retiring every day, or about 4 million a year, and will continue to generate more Medicare business.

"The great thing about the product is, everybody has to buy it," Bertolini said.

The company raised its adjusted earnings forecast to $9.45 per share to $9.55 per share for 2017, from $8.80 per share to $9.00 per share.

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