So far, there appears to be nothing but good news for the four health insurance companies involved in two massive mergers that are currently awaiting approval by federal regulators.
Less than two weeks ago, Anthem, which plans to purchase Cigna in a record $48 billion deal, reported profits that outpaced expectations. Late last week, Cigna similarly reported better-than-anticipated figures for the third quarter.
Revenue for the Connecticut-based company’s commercial and government insurance plans rose 8 percent during the third quarter, to $6.62 billion. Enrollment in its government plans also increased by 8 percent.
However, just like Anthem, Cigna’s profits were partially offset by a decrease in enrollment in its individual private plans. The dips are part of a national trend that is worrisome to those in charge of implementing the Patient Protection and Affordable Care Act.
Due to confusion over paperwork and high costs, a significant number of people who have signed up for plans on the PPACA insurance exchanges have either dropped their plans or been kicked off. Anthem CEO Joseph Swedish has also attributed the dip in enrollment in his company’s individual plans to “unsustainable” pricing from competitors.
Things are also looking good at Humana, whose shareholders approved a $37 billion purchase offer from rival Aetna. Humana’s estimated third quarter profits rose by three cents a share. The success is largely driven by a 14 percent increase in enrollment in its Medicare Advantage plans.
Like the other major insurers, Humana took a hit in the individual market, seeing its enrollment in such plans decline by 11 percent.
"We remain cautious with regard to our expectations around 2016 earnings growth due to the ongoing challenges in the individual commercial business," Humana's Chief Financial Officer Brian Kane said in a statement.
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