Mixed bag of enrollment gains, profit losses for top insurers


While seven top dogs in the health insurance industry experienced a decrease in profit margins from year-end 2012 to year-end 2013, many also saw an increase in enrollment, according to a new analysis from consultant company Mark Farrah Associates.

The analysis provides some encouragement for Aetna, Cigna, Health Care Service Corporation, Humana, Kaiser Permanente, UnitedHealth Group and WellPoint--five of the seven collectively covered 143.6 million members in commercial, Medicare and Medicaid plans as of December 2013.

Here's what MFA found:

Enrollment gains

Good news for some: Aetna and UnitedHealth experienced the most gains from year-end 2012 to year-end 2013--21.6 percent and 11.3 percent, respectively. Aetna enrolled 22.2 million members last year, while UnitedHealth enrolled 40.6 million. These membership changes are partly thanks to mergers and acquisitions, notes the analysis.

HCSC's overall membership increased by about 4 percent last year, covering a total of 13.8 million individuals as of December 2013. Cigna overall membership experienced a small increase of 1.3 percent, while Kaiser saw a slight uptick of less than 1 percent.

Some bad news for the remaining two insurers: WellPoint experienced a decrease of 1.3 percent in total enrollment, yet saw administrative services only (ASO) membership increase by 0.6 percent. Humana's total enrollment declined by 3.8 percent and ASO enrollment dropped by 2.8 percent.

Profit margin losses

These seven leaders all saw a decline in profitability last year, although profit margins remained in the positive range, according to MFA. Last year, Aetna raked in $1.9 billion net income on revenues of $44.4 billion, for a profit margin of 4.3 percent, down from 5.13 in 2012.

UnitedHealth had a net income of $7.3 billion on total revenues of $113.8 in 2013, for a profit margin of 6.4 percent, down from 7.5 percent in 2012. WellPoint's margin also was down from 4.3 percent in 2012 to 3.5 percent last year. The insurer cites healthcare reform costs as a main factor, notes the analysis. Kaiser's margin relatively remained stable. 

For more:
- here's the announcement
- read the MFA analysis

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