The country’s fifth-largest insurer, which also sells plans in the Obamacare marketplaces, reported declining profits Thursday morning, due to unfavorable medical costs in its individual and government businesses that offset growth in its commercial employer and specialty businesses.
Profits for Cigna Corp. fell by 8.8 percent in the final quarter of last year. The company, which is set to merge with Anthem, the second-largest insurer, reported earnings of $426 million or $1.64 a share, down from $467 or $1.77 a share a year earlier.
Policymakers are closing watching how insurers participating in the Affordable Care Act exchanges are faring in their third year of offering products to Americans buying plans through the marketplaces. Some insurers, including UnitedHealthcare, have threatened to pull out of the marketplaces next year due to losses.
Cigna didn’t indicate Thursday exactly how its marketplace plans are faring. CEO David Cordani said in December that the company hasn’t made any money selling them, but doesn’t intend to pull out.
The company did say Thursday that its medical-loss ratio, or the share of premiums paid out for customers’ health expenses, was 83.1 percent for its government-based business. That included some “unfavorable medical cost variability in a specific market,” the report said.
The company paid out less in healthcare expenses for customers buying commercial plans, and reported an 80.4 percent medical loss ratio in that market.
