(Reuters) - Aetna Inc reported a better-than-expected profit on Tuesday, helped primarily by strength in the U.S. health insurer's commercial and government unit even as the company continued to face pressure in its Obamacare business.
The White House is eager to move forward on legislation to repeal and replace the Affordable Care Act, commonly called Obamacare, to make good on a key campaign promise. Republicans tried but failed to pass a replacement bill in March in an embarrassing setback for the Trump administration.
Aetna, which walked away from its $34 billion deal for Humana Inc after it was blocked, also raised its forecast for full-year 2017 adjusted earnings to $8.80 to $9.00 per share.
It had previously forecast full-year earnings of at least $8.55 per share.
"This strong start to the year has enabled Aetna to absorb continued pressure from our individual commercial products," Aetna Chief Executive Mark Bertolini said in a statement.
The No. 3 U.S. health insurer said its net loss was $381 million, or $1.11 per share, in the first quarter ended March 31, compared with a profit of $737 million, or $2.08 per share, a year earlier.
The company reported a quarterly loss primarily due to costs associated with termination of the Humana merger agreement.
Excluding items, Aetna earned $2.71 per share, smashing past analysts' average estimate of $2.37, according to Thomson Reuters I/B/E/S.
Aetna said its medical benefit ratio — the percent of premiums spent on claims — rose to 79.4 percent in its commercial business from 77.8 percent, a year earlier.
The company said the increase was due to temporary suspension of health insurance fee in 2017 and higher medical costs in its individual commercial products.
Aetna said last month it would exit Iowa's Obamacare-compliant individual insurance market in 2018 and it was still evaluating other remaining individual insurance markets, citing financial risk and the uncertain outlook.
The health insurer exited about a dozen markets this year and said in January it had more than 240,000 people in such individual plans and expected to post losses on them this year.
Aetna said adjusted revenue fell 1.3 percent to $15.49 billion, but marginally above estimates of $15.44 billion. (Reporting by Ankur Banerjee in Bengaluru; Editing by Shounak Dasgupta)
May 2, 2017 at 07:32AM
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