Facing a 'transition year,' Aetna's fourth-quarter profits are halved

The insurer's net income dropped 49 percent as higher medical costs squeezed the profit margin for the insurer.

The Wall Street Journal: Aetna's Profit Is Halved On Charges, Higher Costs
This will be something of a transition year for managed-care firms as they gear up for major changes under the health-care overhaul law that start in 2014, such as expanded coverage to millions of Americans through state-based exchanges and an extended Medicaid program. Aetna is also working toward closing on the purchase of Coventry Health Care Inc. through a cash-and-stock deal that was valued at $5.7 billion when it was announced in August (Kamp, 1/31).

The Associated Press: Aetna's 4thQ Profit Sinks 49 Pct, Medical Costs Climb
Aetna's fourth-quarter net income sank 49 percent as higher medical costs squeezed profitability for the insurer's commercial health coverage, and several one-time expenses chipped away at the bottom line. The Hartford, Conn., company said Thursday the amount it paid in medical claims grew more than 9 percent in the quarter to $6.12 billion as a rise in flu-related expenses countered a drop in use when Superstorm Sandy swept up the East Coast last fall. ... Aetna officials said their medical costs also climbed in the final quarter of 2012 because employer-sponsored health insurance coverage is changing (Murphy, 1/31).