Hartford, Conn.-based Aetna saw revenue decrease in the second quarter of fiscal year 2017, but lower operating expenses fueled a year-over-year surge in net income.
Here are four things to know.
1. Aetna reported net income of $1.2 billion in the three months ended June 30, compared to $791 million in the same period of fiscal year 2016. The payer attributed the profit jump to strong performance in its healthcare segment and a large year-over-year decline in estimated risk adjustment payables for the previous year in its individual and small group ACA-compliant plans.
2. Although Aetna's profits rose, the payer reported a decrease in revenue for the second quarter of fiscal year 2017 due to lower premiums in its healthcare segment, including lower ACA-compliant plan membership. Aetna saw revenues of $15.5 billion in the second quarter of this fiscal year compared to $16 billion in the same period a year prior.
3. Aetna's operating expenses fell year-over-year in the second quarter of fiscal year 2017. The payer reported operating expenses of $2.6 billion in the second quarter, down from $2.9 billion recorded in the same time in fiscal year 2016. Lower transaction and integration-related costs, suspension of the ACA's health insurance tax and expense management initiatives drove the year-over-year decrease.
4. Despite year-over-year improvement in Aetna's second-quarter financial results, the payer's net income for the first six months ended June 30 was $822 million, down from $1.5 billion recorded in the first six months of fiscal year 2016.