Aetna (NYSE:AET) and other insurers say conditions in the commercial health insurance market remain challenging.
Aetna is reporting $499 million in net income for the latest quarter on $8.9 billion in revenue, up from $490 million in net income on $8.4 billion in revenue for the third quarter of 2011.
The company ended the quarter providing or administering coverage for about 18 million people, or about as many people as it covered a year earlier.
But enrollment in commercial health insurance plans fell 1.7 percent, to 16 million.
Joseph Zubretsky, Aetna's chief financial officer (CFO), said during a conference call the company held with analysts to discuss the third-quarter results that lack of employment growth could limit opportunities for commercial insured enrollment growth.
"We will not attempt to increase market share aggressively and put the maintenance of our margin profile at risk," Zubretsky said. "When faced with the choice, Aetna will always choose margins over membership."
Zubretsky said later during the call that he expects Aetna and competitors to be spending about $6 per member per month on a risk adjustment program related to the Patient Protection and Affordable Care Act (PPACA).
The full cost of a new PPACA health insurance tax could amount to about 2.5 percent of premium revenue, Zubretsky said.
Assurant (NYSE:AIZ) is reporting that its Assurant Health unit generated $11 million in net operating income during the latest quarter on $405 million in net earned premiums, fees and other income.
That compares with $5.8 million in net operating income on $438 million in net earned premiums, fees and other income in the third quarter of 2011.
Although net operating income was up, "sales decreased in third quarter 2012 due to a decline in small employer group sales," Assurant said.
At Assurant, Mike Peninger, that company's CFO, said Assurant Health sees its group market target as being employers with fewer than 10 employees.
"We are seeing fewer businesses of that size adding employees or looking for coverage," Peninger said.
High unemployment and low payroll growth continue to be a challenge, Peninger said.
Executives also talked about the PPACA health insurance exchanges and said that, at this point, they see states and federal agencies working hard on the exchanges but don't really know how the exchanges will work.
Symetra Financial Corp. (NYSE:SYA), a company that sells stop-loss insurance, or insurance for employers' self-insured health plans, said it sold $24 million in stop-loss during the quarter and collected $128 million in stop-loss premium revenue.
Symetra generated $16 million in new stop-loss sales and $126 million in stop-loss premium revenue during the third quarter of 2011.