Sunday, August 02, 2009

So proud of my health insurance company

Cigna Corp. is my health insurance company with the State of Wyoming. The company gobbled up our old insurance company, Great West Life, in the interest in making even more ungodly profits.

I'm wondering how much of this record profit goes toward the corporate chieftains so they can deny coverage to people like me.

Tom Murphy reports this in Business Week mag:

Health insurer Cigna Corp. said Thursday its second-quarter profit jumped 60 percent on a more favorable interest rate and other items but, like other major health insurers, enrollment tumbled as employers cut jobs.

The Philadelphia company said it earned $435 million, or $1.58 per share, up from $272 million, or 96 cents per share. Revenue fell 8 percent to $4.49 billion from $4.86 billion. Adjusted profit from operations grew 3 percent to $313 million, or $1.14 per share.

Analysts expected a profit of 96 cents per share on $4.8 billion in revenue, according to Thomson Reuters. Cigna includes results from one of its discontinued businesses in its adjusted profit, but many analysts do not in their projections.

Cigna operates health care, group disability and life and international business segments.

Its results reflect solid contributions from each portion "and, in this challenging economic environment, demonstrate the benefit of our diversified portfolio of businesses," Chairman and CEO H. Edward Hanway said during a conference call with analysts.

Cigna shares rose 9 percent, or $2.50, to $9.43 in Wednesday morning trading.
Cigna said 40 cents per share of its profit came from its guaranteed minimum income benefits business, which took a large charge in the first half of 2008 and had been a drag on past earnings.

Cigna discontinued that business and its variable annuity death benefits in 2000. The insurer operates both in run-off mode, meaning it seeks no new business for them. Equity market declines led to charges from both businesses that hurt Cigna in recent quarters.

The insurer also said a decision to freeze its pension plan also helped in the second quarter, providing a benefit of 11 cents per share.

Total enrollment fell to 11.2 million, down from 12.1 million in the same quarter last year. Cigna said premiums and fees for its health care segment, the largest portion of its business, fell 7 percent to $2.85 billion due to the enrollment decline.

Company officials said during a conference call with analysts that the decline was higher than expected, but they attributed 80 percent of it to employees losing health insurance, not employers dropping Cigna as a benefits provider.

The company raised its full-year adjusted profit outlook, to $3.80 to $4 per share. That tops analysts' profit expectations of $3.71 per share. In June, Cigna had projected earnings of $3.70 to $3.90 per share. The new outlook assumes that capital markets will remain stable for the rest of the year.

However, Cigna now expects a larger membership decline. It forecast a 5 to 5.5 percent decrease in enrollment, compared with an earlier forecast of a decline of 3 to 4 percent. Enrollment at the start of 2009 was roughly 11.7 million people.

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