netrashetty
Netra Shetty
Aetna, Inc. (pronounced /ˈɛtnə/; NYSE: AET) is an American health insurance company, providing a range of traditional and consumer directed health care insurance products and related services, including medical, pharmaceutical, dental, behavioral health, group life, long-term care, and disability plans, and medical management capabilities. Aetna is a member of the Fortune 100.
Aetna Inc. (NYSE: AET) is the third largest diversified healthcare provider, serving 36.1 million people in the United States and earning $34 billion in 2009 revenues.[1] [2] Aetna sells a wide range of health and life insurance products categorized as health, dental, pharmacy, group life, disability, and long-term care. Aetna essentially sells protection from risk: as an insurer, is agrees to pay for a percentage of its customers' medical expenses in exchange for a fee, called the premium. The basic business plan is to offer clients a premium based on the the expected cost of caring for them, plus a markup for administrative costs and profit.
Aetna's greatest challenge has been to maintain a profitable membership in light of increasing unemployment and U.S. health care reform.[3] However, troubles related to membership are not new and precede the 2008 crisis, with membership growth down by 65% between 2007 and 2008 despite an acquisitions campaign.[4]
Company Overview
Aetna sells health insurance to over 36.5 million people in the United States, making it the third largest national healthcare provider.[4] 88% of Aetna's revenue comes from the health care premiums it charges its customers.[5] The remainder comes from pension management fees and from investment income.[6] Aetna operates its business in three markets: health care, life insurance, and large case pensions.[6] In 2007, AET acquired Schaller Anderson and Goodhealth Worldwide in an effort to expand its Health Care product line.[7][8]
Business Financials and Operating Metrics
In 2009, Aetna’s revenues reached $34.8 billion, a 12.3% increase over the previous year. However, over this same period net income fell by 7.8% to $1.3 billion, as Aetna experienced a growth in medical expenses in its Heath Care products and specifically the Commercial segment. In 2009 it’s medical benefit ratio (the ratio of medical costs to premiums) grew to 85.2%, versus 81.5% in 2008 and 80.4% in 2007.[9]
AET's Group Insurance Business includes group life, disability and long-term care products. It recorded an operating income of $103.8 million compared to $136.8 million in 2008. The decrease was due to increased reserves in the disability business. Futher, AET's Large Case Pensions business unit, which manages a variety of discontinued and other retirement and savings products, reported operating earnings of $32.2 million compared to $38.8 million in 2008.[10]
Income Statement for FY 2006-2009 (Dollars in millions)
[11][4] 2006 2007 2008 2009
Revenue $25,145.7 $27,599.6 $30,950.7 $34,678.9
Income from Continuing Operations 1685.6 1831.0 1920.9 1237.9
Net Income 1701.7 1831.0 1384.1 1276.5
Net realized capital (losses) gains 24.1 (47.9) (482.3) 55.0
Assets 47,626.4 50,724.7 35,852.5 38,550.4
FY2010 Q1 Earnings Summary
Aetna posted a net income of $526 million in the first reporting quarter of FY2010, a 29% increase compared to $437.8 million in first quarter FY2009.[12] However, this increase in profit mainly reflected one-time gains and higher revenues, despite decline in overall memberships. Also, first quarter earnings included positive litigation-related insurance proceeds of $45.5 million and net realized capital gains of $86.5 million.
Excluding these items, operating earnings actually dropped 28% to $337.4 million from $467.1 million in Q1 FY2009 as a result of lower Commercial underwriting margins, higher medical costs, and lowered insured membership.[13] Quarterly Health are premiums, for example, declined to $6.895 billion from $6.992 billion same period last year. Other premiums also dropped to $474.7 million from $485.1 million same period year ago.
FY2010 Q2 Earnings Summary
Aetna posted net income of $491.0 million ($1.14 EPS) for the second reporting quarter of FY2010, an increase of 41.7% compared to $346.6 million ($0.77 EPS) in Q2 FY2009.[14] Reported operating income for the second quarter came to $450.2 million, a increase of 45.9% compared to $308.5 million in Q2 FY2009.[15] Revenues, however, excluding net realized capital gains, decreased by 2% to $8.50 billion from $8.66 billion in Q2 FY2009. However, as analyst estimates for revenues averaged around $8.49 billion, this beat by analyst expectations.[16]
Aetna attributes its earnings increase to a higher commercial underwriting margin due to favorable Q1 FY2010 reserve development and improved performance. However, these gains, as seen by almost all major health insurers may be derived by the fact that claims from previous quarters came in much lower than expected. This is specifically because flu season was much milder than anticipated, and that the swine flu scare was less intense than anticipated.[17] Aetna reaffirmed its FY2010 EPS outlook, expecting operating EPS to be between the $2.75 to $2.85 range.[18]
FY2010 Q3 Earnings Summary
AET posted earnings of $497.6 million for the third quarter of FY2010. Revenues came in at $8.54 billion, which was down from $8.72 billion.[19] AET attributes profit growth in the quarter largely due to higher commercial-underwriting margins. Medical cost ratios improved to 81.8% from 85.6%.[20] Further health-care costs in prior periods have turned to be lower than originally projected, which also resulted in favorable reserve releases.
As a result, Aetna has boosted its full-year outlook for operating profit about $3.60 per share while analysts previously forecast about $3.20 per share.[21] In the near future, the Obamacare reforms will require insurers to spend certain medical loss ratios or else they must pay rebates back to its customers.[22]
Business Segments
Aetna conducts its business in three areas: health care, group insurance, and large case pensions. Each segment is distinct and offers separate products and services.[6]
Health Care: The Health Care segment offers medical, dental and vision plans, and pharmacy benefits management offered on both an Insured basis and an employer-funded basis. Health Care also provides Medicare and Medicaid services and products.[6]
Group Insurance: The Group Insurance segment covers group life insurance products, including basic group term life insurance, voluntary or supplemental programs, group universal life, and accidental death and dismemberment coverage.[6]
Large Case Pensions: The Large Case Pensions segment covers retirement products for tax qualified pension plans.[6]
Breakdown of Aetna's Membership b Geographic Region[23]
Most of Aetna’s 19 million medical members are privately insured, while government-run Medicare and Medicaid do not represent a large part of Aetna’s business portfolio. As of September 2009 Aetna’s medical membership was concentrated mainly in large (over 50 members) employer health plans (85%), followed by small employer plans (6%), Medicaid (5%), Medicare (2%), and individual plans (2%). [24]
Divestiture of Pharmacy Benefit Management Segment
According to the Wall Street Journal, Aetna is shopping its 11.2 million member pharmacy benefit management (PBM) segment, with potential buyers including CVS Caremark Corporation and MedcoHealth Solutions.[25] PBM's administer prescription drug benefits for employers and health plans through mail-order pharmacies. Analysts have speculated that PBM divestitures will rise due to the fact that Wall Street tends to value independent PBMs more highly than PBMs owned by large health insurance corporations.[26] In April 2009, Express Scripts acquired competitor Wellpoint's PBM business for $4.7 billion.[27] A report released by Citi Investment Research valued Aetna's PBM business at $2.2 billion.[28]
Key Trends and Forces
Healthcare reform will impact many aspects of Aetna's business
On March 30, 2010, President Obama signed into law the Patient Protection and Affordable Care Act, the much awaited and much debated health reform law. Several of its provisions will affect Aetna and other insurers. The overall effect, however, remains to be seen.
The law includes a large number of health-related provisions to take effect over the next four years, including expanding Medicaid eligibility, subsidizing insurance premiums, providing incentives for businesses to provide health care benefits, prohibiting denial of coverage/claims based on pre-existing conditions, establishing health insurance exchanges, and support for medical research. The costs of these provisions are offset by a variety of taxes, fees, and cost-saving measures, such as new Medicare taxes for high-income brackets, taxes on indoor tanning, cuts to the Medicare Advantage program in favor of traditional Medicare, and fees on medical devices and pharmaceutical companies; there is also a tax penalty for citizens who do not obtain health insurance (unless they are exempt due to low income or other reasons).
The expansion of Medicaid together with the health insurance mandate and premium subsidies are projected to expand insurance to 32 million Americans without coverage. Aetna, as one of the the largest insurers as well as one of the largest Medicaid contractors, stands to benefit from this. [29]
The law will end the practices of refusing to cover patients with pre-existing conditions. This will likely lead to an increase in premium costs; however, given that the rule applies across the board, it may not hurt insurers’ competitive positioning. The mandate for employers to coverage for dependents of employees who don't have access to other employer-based health care coverage until the age of 26 is also likely to result in premium hikes. [30]
Cuts to Medicare Advantage program reimbursements may hurt Aetna, with its 440,000 MA enrollees as of March 2010, in the short term. In the long term, Aetna may lose out still more: as MA beneficiary premiums increase to reflect lower government reimbursements, Medicare patients may migrate to less profitable Prescription Drug Plans and opt to receive their medical benefits from the traditional government-run Medicare program. The health care law will also effectively begin to cap insurance company profits in 2011. Insurers will be required to spend 85% of large-group and 80% of small-group plan premiums on medical costs, or else improve health-care quality or return the difference to customers in the form of a rebate. However, Wellpoint reportedly reclassified certain administrative expenses--$500 million dollars worth--in a way that increased its medical loss ratio. In January, Wellpoint began costs such as as nurse hotlines, "medical management," and "clinical health policy," under medical benefits. Thus, the impact remains to be seen.[31]
Rising Unemployment in has led to a Decrease in Health Care Enrollment with Subsequent Losses in Membership.
The 2008 economic crisis has impacted unemployment rates up to current, with unemployment rates reaching at around 9-10% levels -- the highest it has been in a quarter-century.[32] As unemployment increases, laid off workers lose access to employer-based health care. This subsequent decrease in health care expenditure impacts health care providers and the health care industry at large by decreasing their membership.[33] As a result, health insurers has seen a decrease in growth in net income and operating earnings, especially in its health care market.
Rising healthcare costs put pressure on earnings
Rising healthcare cost is a major concern for health insurance companies, and trends show healthcare costs for U.S. businesses rising 9% in 2010. These rising medical costs combine with the recession and increased unemployment to create a "tug-of-war" between the need to raise premiums and the downtrend on enrollment and willingness of consumers and business to pay high premiums.[34] These competing pressures are having the overall effect of lowering all health insurers' revenues and margins. Health insurer's ability to mitigate the negative effects of rising healthcare and unemployment will be critical to it's ability to maintain strong earnings and compete in the health insurance industry.
Strained Credit Lines Have Hit Debt Securities Impacting Aetna's Income and Capital Values.
The 2008 economic crisis resulted in strained credit lines across many industries, leading to numerous debt-related problems for many companies. Aetna incurred a loss of $482 million caused primarily by losses associated with its debt-securities.[4] As the recession in the United States deepens, speculation over debt payment has led to further economic losses and market volatility.[35] The value of Aetna's holdings decreased by $1.1 billion between 2007 and 2008.[36] Though a problem across the entire industry, Aetna still has $14 billion in debt and other related security holdings that are at risk for future losses.[37]
Competition
Aetna differentiates itself from other players in the industry by offering improved communications to customers, especially those purchasing employer-based health care. [38] Aetna offers information management services to its customers in all areas, especially in the Health Care market.
Aetna's Main Competitors
UnitedHealth Group (UNH)-- UnitedHealth Group is a diversified health care company that operates in four segments: Health Care Services, OptumHealth, Ingenix and Prescription Solutions.
CIGNA Corporation (CI)-- CIGNA is an investor-owned health care company based in the U.S. and operates in five business segments: HealthCare; Disability and Life; International; Run-off Reinsurance, and Other Operations.
WellPoint Health Networks (WLP)-- WellPoint is a health benefits company that is licensed by the Blue Cross and Blue Shield Association.
Top 10 U.S. Health Plans by Total Enrollment[39]
2009 Rank Company 2007 Enrollment 2009 Enrollment
1 WellPoint Health Networks (WLP) 30,242,907 33,952,110
2 UnitedHealth Group (UNH) 17,080,995 31,980,000
3 Aetna (AET) 13,861,191 18,557,996
4 Health Care Service Corporation 12,109,624 12,400,000
5 CIGNA Corporation (CI) 9,081,140 11,131,599
6 Kaiser Permanente 8,846,616 8,722,019
7 Humana (HUM) 11,358,428 8,359,031
8 Health Net, Inc. N/A 6,659,000
9 Blue Cross Blue Shield of Michigan 4,570,981 4,548,575
10 Highmark, Inc. N/A 4,114,476
Latest Full Context Quarter Ending Date
2010/09
EBIT Margin
8.2%
EBITDA Margin
8.2%
Pre-Tax Profit Margin
7.5%
Interest Coverage
11.4
Leverage Ratio
3.9
Asset Turnover
0.9
Revenue to Assets
0.9
ROE from Total Operations
17.2%
Return on Invested Capital
8.1%
Return on Assets
4.4%
Debt/Common Equity Ratio
1.12
Price/Book Ratio (Price/Equity)
1.51
Book Value per Share
$24.99
Total Debt/ Equity
1.36
Long-Term Debt to Total Capital
0.53
Cash Flow per Share
$4.29
Free Cash Flow per Share
$2.68
Tangible Book Value per Share
$10.83
Price/Cash Flow Ratio
8.8
Price/Free Cash Flow Ratio
14.0
Price/Tangible Book Ratio
3.48
Most recent data
5-Year Averages
Return on Equity
16.7%
Return on Assets
3.6%
Return on Invested Capital
12.8%
Pre-Tax Profit Margin
8.5%
Post-Tax Profit Margin
5.5%
Net Profit Margin (Total Operations)
5.2%
Debt/Equity Ratio
0.30
Total Debt/Equity Ratio
0.3
Aetna Inc. (NYSE: AET) is the third largest diversified healthcare provider, serving 36.1 million people in the United States and earning $34 billion in 2009 revenues.[1] [2] Aetna sells a wide range of health and life insurance products categorized as health, dental, pharmacy, group life, disability, and long-term care. Aetna essentially sells protection from risk: as an insurer, is agrees to pay for a percentage of its customers' medical expenses in exchange for a fee, called the premium. The basic business plan is to offer clients a premium based on the the expected cost of caring for them, plus a markup for administrative costs and profit.
Aetna's greatest challenge has been to maintain a profitable membership in light of increasing unemployment and U.S. health care reform.[3] However, troubles related to membership are not new and precede the 2008 crisis, with membership growth down by 65% between 2007 and 2008 despite an acquisitions campaign.[4]
Company Overview
Aetna sells health insurance to over 36.5 million people in the United States, making it the third largest national healthcare provider.[4] 88% of Aetna's revenue comes from the health care premiums it charges its customers.[5] The remainder comes from pension management fees and from investment income.[6] Aetna operates its business in three markets: health care, life insurance, and large case pensions.[6] In 2007, AET acquired Schaller Anderson and Goodhealth Worldwide in an effort to expand its Health Care product line.[7][8]
Business Financials and Operating Metrics
In 2009, Aetna’s revenues reached $34.8 billion, a 12.3% increase over the previous year. However, over this same period net income fell by 7.8% to $1.3 billion, as Aetna experienced a growth in medical expenses in its Heath Care products and specifically the Commercial segment. In 2009 it’s medical benefit ratio (the ratio of medical costs to premiums) grew to 85.2%, versus 81.5% in 2008 and 80.4% in 2007.[9]
AET's Group Insurance Business includes group life, disability and long-term care products. It recorded an operating income of $103.8 million compared to $136.8 million in 2008. The decrease was due to increased reserves in the disability business. Futher, AET's Large Case Pensions business unit, which manages a variety of discontinued and other retirement and savings products, reported operating earnings of $32.2 million compared to $38.8 million in 2008.[10]
Income Statement for FY 2006-2009 (Dollars in millions)
[11][4] 2006 2007 2008 2009
Revenue $25,145.7 $27,599.6 $30,950.7 $34,678.9
Income from Continuing Operations 1685.6 1831.0 1920.9 1237.9
Net Income 1701.7 1831.0 1384.1 1276.5
Net realized capital (losses) gains 24.1 (47.9) (482.3) 55.0
Assets 47,626.4 50,724.7 35,852.5 38,550.4
FY2010 Q1 Earnings Summary
Aetna posted a net income of $526 million in the first reporting quarter of FY2010, a 29% increase compared to $437.8 million in first quarter FY2009.[12] However, this increase in profit mainly reflected one-time gains and higher revenues, despite decline in overall memberships. Also, first quarter earnings included positive litigation-related insurance proceeds of $45.5 million and net realized capital gains of $86.5 million.
Excluding these items, operating earnings actually dropped 28% to $337.4 million from $467.1 million in Q1 FY2009 as a result of lower Commercial underwriting margins, higher medical costs, and lowered insured membership.[13] Quarterly Health are premiums, for example, declined to $6.895 billion from $6.992 billion same period last year. Other premiums also dropped to $474.7 million from $485.1 million same period year ago.
FY2010 Q2 Earnings Summary
Aetna posted net income of $491.0 million ($1.14 EPS) for the second reporting quarter of FY2010, an increase of 41.7% compared to $346.6 million ($0.77 EPS) in Q2 FY2009.[14] Reported operating income for the second quarter came to $450.2 million, a increase of 45.9% compared to $308.5 million in Q2 FY2009.[15] Revenues, however, excluding net realized capital gains, decreased by 2% to $8.50 billion from $8.66 billion in Q2 FY2009. However, as analyst estimates for revenues averaged around $8.49 billion, this beat by analyst expectations.[16]
Aetna attributes its earnings increase to a higher commercial underwriting margin due to favorable Q1 FY2010 reserve development and improved performance. However, these gains, as seen by almost all major health insurers may be derived by the fact that claims from previous quarters came in much lower than expected. This is specifically because flu season was much milder than anticipated, and that the swine flu scare was less intense than anticipated.[17] Aetna reaffirmed its FY2010 EPS outlook, expecting operating EPS to be between the $2.75 to $2.85 range.[18]
FY2010 Q3 Earnings Summary
AET posted earnings of $497.6 million for the third quarter of FY2010. Revenues came in at $8.54 billion, which was down from $8.72 billion.[19] AET attributes profit growth in the quarter largely due to higher commercial-underwriting margins. Medical cost ratios improved to 81.8% from 85.6%.[20] Further health-care costs in prior periods have turned to be lower than originally projected, which also resulted in favorable reserve releases.
As a result, Aetna has boosted its full-year outlook for operating profit about $3.60 per share while analysts previously forecast about $3.20 per share.[21] In the near future, the Obamacare reforms will require insurers to spend certain medical loss ratios or else they must pay rebates back to its customers.[22]
Business Segments
Aetna conducts its business in three areas: health care, group insurance, and large case pensions. Each segment is distinct and offers separate products and services.[6]
Health Care: The Health Care segment offers medical, dental and vision plans, and pharmacy benefits management offered on both an Insured basis and an employer-funded basis. Health Care also provides Medicare and Medicaid services and products.[6]
Group Insurance: The Group Insurance segment covers group life insurance products, including basic group term life insurance, voluntary or supplemental programs, group universal life, and accidental death and dismemberment coverage.[6]
Large Case Pensions: The Large Case Pensions segment covers retirement products for tax qualified pension plans.[6]
Breakdown of Aetna's Membership b Geographic Region[23]
Most of Aetna’s 19 million medical members are privately insured, while government-run Medicare and Medicaid do not represent a large part of Aetna’s business portfolio. As of September 2009 Aetna’s medical membership was concentrated mainly in large (over 50 members) employer health plans (85%), followed by small employer plans (6%), Medicaid (5%), Medicare (2%), and individual plans (2%). [24]
Divestiture of Pharmacy Benefit Management Segment
According to the Wall Street Journal, Aetna is shopping its 11.2 million member pharmacy benefit management (PBM) segment, with potential buyers including CVS Caremark Corporation and MedcoHealth Solutions.[25] PBM's administer prescription drug benefits for employers and health plans through mail-order pharmacies. Analysts have speculated that PBM divestitures will rise due to the fact that Wall Street tends to value independent PBMs more highly than PBMs owned by large health insurance corporations.[26] In April 2009, Express Scripts acquired competitor Wellpoint's PBM business for $4.7 billion.[27] A report released by Citi Investment Research valued Aetna's PBM business at $2.2 billion.[28]
Key Trends and Forces
Healthcare reform will impact many aspects of Aetna's business
On March 30, 2010, President Obama signed into law the Patient Protection and Affordable Care Act, the much awaited and much debated health reform law. Several of its provisions will affect Aetna and other insurers. The overall effect, however, remains to be seen.
The law includes a large number of health-related provisions to take effect over the next four years, including expanding Medicaid eligibility, subsidizing insurance premiums, providing incentives for businesses to provide health care benefits, prohibiting denial of coverage/claims based on pre-existing conditions, establishing health insurance exchanges, and support for medical research. The costs of these provisions are offset by a variety of taxes, fees, and cost-saving measures, such as new Medicare taxes for high-income brackets, taxes on indoor tanning, cuts to the Medicare Advantage program in favor of traditional Medicare, and fees on medical devices and pharmaceutical companies; there is also a tax penalty for citizens who do not obtain health insurance (unless they are exempt due to low income or other reasons).
The expansion of Medicaid together with the health insurance mandate and premium subsidies are projected to expand insurance to 32 million Americans without coverage. Aetna, as one of the the largest insurers as well as one of the largest Medicaid contractors, stands to benefit from this. [29]
The law will end the practices of refusing to cover patients with pre-existing conditions. This will likely lead to an increase in premium costs; however, given that the rule applies across the board, it may not hurt insurers’ competitive positioning. The mandate for employers to coverage for dependents of employees who don't have access to other employer-based health care coverage until the age of 26 is also likely to result in premium hikes. [30]
Cuts to Medicare Advantage program reimbursements may hurt Aetna, with its 440,000 MA enrollees as of March 2010, in the short term. In the long term, Aetna may lose out still more: as MA beneficiary premiums increase to reflect lower government reimbursements, Medicare patients may migrate to less profitable Prescription Drug Plans and opt to receive their medical benefits from the traditional government-run Medicare program. The health care law will also effectively begin to cap insurance company profits in 2011. Insurers will be required to spend 85% of large-group and 80% of small-group plan premiums on medical costs, or else improve health-care quality or return the difference to customers in the form of a rebate. However, Wellpoint reportedly reclassified certain administrative expenses--$500 million dollars worth--in a way that increased its medical loss ratio. In January, Wellpoint began costs such as as nurse hotlines, "medical management," and "clinical health policy," under medical benefits. Thus, the impact remains to be seen.[31]
Rising Unemployment in has led to a Decrease in Health Care Enrollment with Subsequent Losses in Membership.
The 2008 economic crisis has impacted unemployment rates up to current, with unemployment rates reaching at around 9-10% levels -- the highest it has been in a quarter-century.[32] As unemployment increases, laid off workers lose access to employer-based health care. This subsequent decrease in health care expenditure impacts health care providers and the health care industry at large by decreasing their membership.[33] As a result, health insurers has seen a decrease in growth in net income and operating earnings, especially in its health care market.
Rising healthcare costs put pressure on earnings
Rising healthcare cost is a major concern for health insurance companies, and trends show healthcare costs for U.S. businesses rising 9% in 2010. These rising medical costs combine with the recession and increased unemployment to create a "tug-of-war" between the need to raise premiums and the downtrend on enrollment and willingness of consumers and business to pay high premiums.[34] These competing pressures are having the overall effect of lowering all health insurers' revenues and margins. Health insurer's ability to mitigate the negative effects of rising healthcare and unemployment will be critical to it's ability to maintain strong earnings and compete in the health insurance industry.
Strained Credit Lines Have Hit Debt Securities Impacting Aetna's Income and Capital Values.
The 2008 economic crisis resulted in strained credit lines across many industries, leading to numerous debt-related problems for many companies. Aetna incurred a loss of $482 million caused primarily by losses associated with its debt-securities.[4] As the recession in the United States deepens, speculation over debt payment has led to further economic losses and market volatility.[35] The value of Aetna's holdings decreased by $1.1 billion between 2007 and 2008.[36] Though a problem across the entire industry, Aetna still has $14 billion in debt and other related security holdings that are at risk for future losses.[37]
Competition
Aetna differentiates itself from other players in the industry by offering improved communications to customers, especially those purchasing employer-based health care. [38] Aetna offers information management services to its customers in all areas, especially in the Health Care market.
Aetna's Main Competitors
UnitedHealth Group (UNH)-- UnitedHealth Group is a diversified health care company that operates in four segments: Health Care Services, OptumHealth, Ingenix and Prescription Solutions.
CIGNA Corporation (CI)-- CIGNA is an investor-owned health care company based in the U.S. and operates in five business segments: HealthCare; Disability and Life; International; Run-off Reinsurance, and Other Operations.
WellPoint Health Networks (WLP)-- WellPoint is a health benefits company that is licensed by the Blue Cross and Blue Shield Association.
Top 10 U.S. Health Plans by Total Enrollment[39]
2009 Rank Company 2007 Enrollment 2009 Enrollment
1 WellPoint Health Networks (WLP) 30,242,907 33,952,110
2 UnitedHealth Group (UNH) 17,080,995 31,980,000
3 Aetna (AET) 13,861,191 18,557,996
4 Health Care Service Corporation 12,109,624 12,400,000
5 CIGNA Corporation (CI) 9,081,140 11,131,599
6 Kaiser Permanente 8,846,616 8,722,019
7 Humana (HUM) 11,358,428 8,359,031
8 Health Net, Inc. N/A 6,659,000
9 Blue Cross Blue Shield of Michigan 4,570,981 4,548,575
10 Highmark, Inc. N/A 4,114,476
Latest Full Context Quarter Ending Date
2010/09
EBIT Margin
8.2%
EBITDA Margin
8.2%
Pre-Tax Profit Margin
7.5%
Interest Coverage
11.4
Leverage Ratio
3.9
Asset Turnover
0.9
Revenue to Assets
0.9
ROE from Total Operations
17.2%
Return on Invested Capital
8.1%
Return on Assets
4.4%
Debt/Common Equity Ratio
1.12
Price/Book Ratio (Price/Equity)
1.51
Book Value per Share
$24.99
Total Debt/ Equity
1.36
Long-Term Debt to Total Capital
0.53
Cash Flow per Share
$4.29
Free Cash Flow per Share
$2.68
Tangible Book Value per Share
$10.83
Price/Cash Flow Ratio
8.8
Price/Free Cash Flow Ratio
14.0
Price/Tangible Book Ratio
3.48
Most recent data
5-Year Averages
Return on Equity
16.7%
Return on Assets
3.6%
Return on Invested Capital
12.8%
Pre-Tax Profit Margin
8.5%
Post-Tax Profit Margin
5.5%
Net Profit Margin (Total Operations)
5.2%
Debt/Equity Ratio
0.30
Total Debt/Equity Ratio
0.3
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