Aetna reports higher than expected profit

Bertolini also backed the timeline for an expected closing in the second half of 2016 of its acquisition of Humana for US$31 billion, based on Monday’s share price.

Aetna’s key medical-benefit ratio, which measures the amount of premiums used to pay patient medical costs, fell to 81.9% from 83%.

Despite its exchange business losses, Aetna recorded net income of $320.8 million for fourth quarter of 2015, an increase of 38.3% over the year before, the company said in a statement.

Aetna’s chairman and CEO said Monday that the country’s third-largest health insurer had “serious concerns” about the sustainability of ObamaCare’s marketplaces.

Guertin said Bertolini’s remarks were meant to underscore that, even though Aetna’s ACA business appears to be improving, the company still thinks there changes are needed in the ACA’s markets. Adjusted earnings advanced 12% to $1.37 a share from $1.22 previous year.

The insurer’s medical enrollment came in almost flat, compared to the final quarter of 2014, at about 23.5 million. Though its fourth-quarter performance was a bit better than it last projected, the business still lost money in 2015, with a negative margin of around 3-4% for the year.

Bertolini told analysts that seven states have approved the merger – he declined to say which ones – and said none of the hearing processes have been contentious.

Aetna Inc. said Monday that its public health insurance exchange business remained unprofitable in 2015 despite narrowing its losses and, for its overall business, improving its underwriting margins. The deal to buy Humana would boost Hartford, Conn.-based Aetna’s Medicare business and give it scale to thrive as the industry consolidates. Analysts polled by FactSet expected adjusted earnings of $1.21 a share on revenue of $14.95 billion.

The deal needs regulatory approval on antitrust grounds from the Department of Justice. The insurer is expanding its bet on the program with an agreement to buy Humana Inc. for about $37 billion in cash and stock, a deal that could close this year.

Aetna shares surged about 1.7 percent to $103.50 in late morning trading, while Anthem and UnitedHealth both dipped slightly.

Aetna is expecting operating earnings for the full year of more than $7.75 per share compared with just $7.71 for 2015.

Anne Steele contributed to this article.