How the 'big 5' payers performed financially in 2016

The five largest U.S. health insurers — Aetna, Anthem, Cigna, Humana and UnitedHealth Group — saw a range of financial results throughout the first three quarters of 2016.

1. Hartford, Conn.-based Aetna's operating revenue increased about 4 percent year over year to $15.7 billion in the first quarter of 2016. The increase in revenue reflected higher premium yields and membership growth in Aetna's government business. However, Aetna's operating earnings dropped about 4 percent during the same period to $810.8 million due to lower operating earnings in Aetna's group insurance segment. The insurer's net income also dropped 6.6 percent in the first quarter of 2016 compared to the same period of 2015.

Aetna's total revenue grew 5 percent year over year to $16 billion in the second quarter of 2016. The insurer boosted its operating income year over year by 8 percent in the second quarter to $783 million. Citing $430 million in losses on its individual plans since January 2014, Aetna announced in its second-quarter earnings release that it was withdrawing from plans to expand its offerings on the 2017 ACA insurance exchanges. Aetna's net income for the second quarter of 2016 was $790.8 million compared with a net income of $731.8 million in the same period of 2015.

Aetna reported revenue increased 6 percent year over year to a total of $15.8 billion in the third quarter of 2016. The payer attributed its increase in revenue to higher healthcare premium yields and growth in its government business membership. However, Aetna is projecting a loss of about $350 million on ACA plans this year. For the first three quarters of this year, Aetna reported net income of $2.1 billion.  

2. Indianapolis-based Anthem reported operating revenue of about $20.3 billion in the first quarter of 2016, a year-over-year increase of 6.5 percent. However, the payer ended the quarter with net income of $703 million, which was down 18.7 percent from the same period last year. The decrease reflected a rise in Anthem's medical-loss ratio, which was 81.8 percent in the first quarter of 2016 comparted to 80.2 percent in the same period in 2015. The MLR increase was primarily driven by higher medical costs in Anthem's individual and Medicaid businesses.

Anthem saw revenue rise 7.2 percent year over year to $21.46 billion in the second quarter of this year. The financial boost was partially attributable to an increase in medical enrollment during the quarter. The payer recorded net income of $780.6 million in the second quarter of 2016, down 10.1 percent year over year from $859.1 million.

In the third quarter of this year, Anthem reported a 7.5 percent increase in revenue from the same period in 2015 to a total of $21.4 billion. The insurer saw a 5.7 percent year-over-year drop in net income to $617.8 million. Through the third quarter of this year, Anthem reported net income of $2.1 billion.

3. Bloomfield, Conn.-based Cigna's net income decreased 2.6 percent year over year to $519 million in the first quarter of this year. The insurer's consolidated operating revenue grew 5.6 percent year over year to $9.9 billion, up from $9.4 billion in the first quarter of last year.

In the second quarter of this year, Cigna's revenue increased 4.9 percent year over year to $9.96 billion due to strong results in its commercial and specialty businesses. However, Cigna's net income dropped 13.9 percent year over year to $503 million in the second quarter of this year. The insurer incurred $26 million in costs related to its pending combination with Anthem in the second quarter.

Cigna said third-quarter revenue rose 5.2 percent year over year to $9.9 billion, boosted by its commercial health insurance business but dented by its government operations. This year the payer's third-quarter profit sank 16.6 percent year over year to $456 million. The decrease partially stems from an increase of Cigna's transaction costs for its proposed combination with Anthem.

4. Louisville, Ky.-based Humana reported revenue of $13.8 billion in the first quarter of this year, down slightly from the same period last year. The insurer recorded net income of $234 million in the first quarter, down 46 percent year over year due to higher individual health plan costs.

Humana saw revenue of $14.01 billion in the second quarter of 2016, up 2 percent year over year from $13.73 billion in the same period last year. Humana posted net income of $636 million in the second quarter, down from $793 million in the same quarter last year.

The payer reported net income of $940 million for the third quarter of 2016, up 38 percent from $681 million in the same period last year. Humana also saw a 2.5 percent year-over-year increase in revenue to $13.7 billion. For the first three quarters of 2016, Humana reported a profit of $2.2 billion. 

5. Minnetonka, Minn.-based UnitedHealth Group reported revenue of $44.5 billion in the first quarter of this year, up 25 percent from the same period last year. The insurer posted net income of $1.6 billion in the first quarter of 2016, up from $1.4 billion in the same period of the year prior.

UnitedHealth saw second-quarter revenue grow 28 percent year over year to $46.5 billion. Profits grew 13 percent year over year to roughly $3.4 billion in the second quarter of 2016.

The insurer reported revenues of $46.3 billion in the third quarter of this year, a year-over-year increase of 12 percent. UnitedHealth reported net income of $1.9 billion in the third quarter of 2016, compared to 1.6 billion in the same period of 2015. Its Optum branch saw revenue increase 9 percent year over year to $21.1 billion in the third quarter of this year.  

The big five health insurers will report their financial results for the fourth quarter of 2016, ending Dec. 31, early next year. 

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